HANDY INFO TO HAVE AT HAND

BTL CRITERIA UPDATE

Our Buy to Let criteria is changing. New and existing pipeline cases will be subject to additional underwriting and we may require additional supporting information. Capital raising Remortgages cases may be limited and in some cases we will restrict the amount capital being raised. Contact the HUB to discuss new cases or Underwriting regarding existing applications

Number of applicants

Four. For Limited Company application details of up to four directors or shareholders as applicants will be captured.  The applicants must cover a minimum of 75% of total shareholding.

Minimum age

21 years at application

Maximum age

80 years at application, 95 years at end of term.

Nationality

Applications from UK nationals and EEA member states must be traceable at a UK address. We will not lend to applicants who are not UK nationals and do not reside in the UK.

Acceptable proof of ID and address

If we are unable to verify all applicants using Electronic ID, proof of ID and residency will be required for each applicant.

Impaired credit

Please refer to the product guide for product credit profile criteria. Credit profile refers to the individual personal applicants.

Consumer buy-to-let

We cannot accept applications for consumer buy-to-let. A consumer buy-to-let is defined as an applicant with no other buy-to-let properties wishing to obtain a mortgage on a property that has either been inherited or has previously been occupied by the applicant or a related person at any time.

First-time buyer

Not acceptable. At least one applicant or Director must have owned, and still own, a residential or buy-to-let property for a minimum of 12 months.

First-time landlord

At least one applicant or Director must have owned, and still own at least one property (residential or Buy to Let) for a minimum of 12 months.

Covid payment deferrals

If the application is from an existing customer, any unexpired payment deferral on an existing TML mortgage must either be brought up to date with the payment deferral ceased and the deferred interest paid in full before we can consider any further lending or the deferred interest capitalised. In both examples there must be 2 consecutive payments made post-expiry/cessation of the payment deferral.

Minimum income & Employment status

There is no minimum income requirement. One or more applicants must be employed/self-employed or be in receipt of pension income. Proof of income is not required in every case, but may be required at U/W discretion. If requested the below outlines evidence required.

Employed

1 month’s payslip required, or P60.

Self-employed

Latest SA302, accounts or Tax Calculation with corresponding Tax Summary.

Contractors

1 month’s payslip or contract.

Retired

Latest pension statement or evidence of other income source.

Proof of basic rate tax status - All applicants

Where all applicants are declared as basic rate tax status during application, proof of basic rate tax status will be required. Where ICR meets 140%, we will assess the cases as such and will not require proof of tax status.

Acceptable proof is tax code status letter/payslip/p60/tax calculation plus tax year overview. Other items may be acceptable on a case by case basis.

Purpose

Purchase and remortgage

Remortgage

Remortgages within 6 months of purchase can be considered. Please contact The Hub for more information.

Repayment method

Capital and interest
Part and part
Interest only

Minimum loan

£25,001

Porting

Our loans are not portable.

Offer validity

3 months.
New build offers will be valid for 6 months.

Maximum loan and LTV

Minimum term

5 years

Maximum term

35 years

Deposit

Deposits are required to be evidenced.

Acceptable deposits

Individual savings
Limited Company/LLP reserves or working capital
Sale of property or pending sales
Sale of shares or investment
Inheritance
Equity from another property

Vendor/Builder gifted deposit

New build properties can have up to 5% builder gifted deposit
Converted properties are up to 5% considered on a case-by-case basis

Gifted deposit

Gifted deposits are allowed from family members i.e. parents, grandparents, spouse, gifts from wider family members. Gifts from non – family members will be considered on a case by case basis. All gifted deposits must be disclosed. Subject to TML Gifted Deposit/Equity Form from deposit provider, identification and evidence of funds.

Family gifted equity

Up to a maximum 75% LTV and satisfaction that the transaction does not constitute Consumer BTL. Gifted deposits are allowed from family members i.e. parents, grandparents, spouse, gifts from wider family members. Gifts from non – family members will be considered on a case by case basis. All gifted deposits must be disclosed. Subject to TML Gifted Deposit/ Equity Form from deposit provider and identification.

Void Reserves

Please provide evidence that the applicant holds a minimum of 3 months of funds to meet mortgage payments in instances of rental voids. Please provide a full copy of a bank or deposit statement/bank data in an electronic format from an approved source demonstrating an acceptable level of savings is available.

Interest coverage rate (ICR) test applies to all cases on an interest-only basis

5 or more years’ fixed rate products: initial rate.
All other products: a nominal rate (currently 5.5%) or the initial rate +2%, whichever is higher.  All ICR tests are exclusive of any fees that can be added to the loan.

ICR

*  Where all applicants are declared as basic rate tax status during application, proof of basic rate tax status will be required. Where the ICR meets 140%, we will assess the cases as such and will not require proof of tax status

Acceptable proof is tax code status letter/payslip/p60/tax calculation plus tax year overview. Other items may be acceptable on a case by case basis.

Minimum valuation

£50,000. For converted properties, HMO or any in London and the South East £120,000.

Maximum valuation

None

Audit valuation

TML reserve the right to undertake an audit valuation (a second full property inspection) on a case by case basis.

Tenure

Freehold or leasehold in England and Wales, absolute ownership or freehold in Scotland.

Locations

We will consider lending on residential properties in mainland England, Wales & Scotland. We will also consider properties on the Isle of Wight & Anglesey. Applications in relation to properties in Northern Ireland are not acceptable.

Acceptable tenancies

AST of either 6 or 12 months if the property is in England.
Private Residential Tenancy, or Short Assured Tenancy (if prior to 1st December 2017) if the property is in Scotland.
Occupation Contract or Standard Contract if the property is in Wales.
Shared households and student lets
Corporate lets
Standard format tenancy

Unacceptable tenancies

Assured, protected or statutory tenancies
Holiday lets

Ex Local Authority

Max LTV for Ex Local Authority is 75%

Click here for full BTL property criteria.

Maximum bedrooms

6

Minimum valuation

£120,000

Maximum LTV

75%

Licence

HMO licence is required if deemed appropriate from the Local Authority.

Ownership

At least one applicant or Director must have owned, let and still own one or more Buy to Let property for a minimum of 12 months.

Applications

We will only accept applications from Special Purpose Vehicle (SPV) Ltd companies.

Acceptable Standard Industrial Classification (SIC) codes

68100 Buying and selling of own real estate
68209 Other letting and operating of own or leased real estate
68320 Management of real estate on a fee or contract basis
68201 Renting and operating of Housing Association real estate.

Directors or shareholders

For Limited Company applications we will accept up to 4 directors or shareholders. They must cover a minimum of 75% shareholding. If the company has less than 4 directors or shareholders, all must be included in the mortgage application.

Personal guarantees

Personal guarantees are required from all directors and shareholders.

Definition

Applicants with 4 or more mortgaged Buy to Let properties

Maximum number of properties

No maximum

Maximum portfolio value

£5,000,000 with The Mortgage Lender.

Evidence requirements

For 4-10 properties:

• Business plan
• Portfolio schedule

On request by underwriting, or for more than 10 properties:

• Business plan
• Portfolio schedule
• Cashflow statement
• Asset and liabilities declaration

Unencumbered properties

Details of  all properties held by applicants should be included in the Portfolio Schedule, including unencumbered properties.