Stuck on a BTL mortgage forever?
Discussion
Per the forthcoming EU mortgage affordability rules due to be implemented March 2016, does this mean that for those currently on a fixed BTL deal, that once this ends and reverts to SVR, you may well be stuck on that specific lenders SVR forever.....?
Currently a lot of BTL mortgages are assessed on the ability of the rent to cover the mortgage, however, this would appear to being forced out of the window, to be replaced with typical "affordability" criteria (per main residence type mortgages.....). Doesn't bode well reading between the lines.
http://www.moneysavingexpert.com/news/mortgages/20...
Sarnie - What are your views on this?
Currently a lot of BTL mortgages are assessed on the ability of the rent to cover the mortgage, however, this would appear to being forced out of the window, to be replaced with typical "affordability" criteria (per main residence type mortgages.....). Doesn't bode well reading between the lines.
http://www.moneysavingexpert.com/news/mortgages/20...
Sarnie - What are your views on this?
Scaremongering.
The most important part of the name of the new directive is "EU".
The UK Financial Services industry is amongst the most heavily regulated industries in Europe. We have things like the FCA and FOS etc........other EU countries have very little like this.
The new directive is actually aimed more at bringing EU countries advice and regulation procedures in line with the UK, not the other way round. The idea is that if you want financial advice in one country, you will be advised under the same framework of regulation as you would be in another EU country.
Very little will change for UK consumers. BTL lenders have been asking for minimum incomes for a number of years since the credit crunch. Some BTL lenders actually already limit your BTL lending based on your income so affordability based BTL lending is already here, for example Clydesdale's lending criteria states;
"This will be assessed as if we were the lender on the client's residential mortgage. This means that, as a guide, the residential mortgage should be no more than 4.5 x income, dependant on individual affordability."
The key is obviously knowing your lender before you are applying, which is where a good Broker can be beneficial
The most important part of the name of the new directive is "EU".
The UK Financial Services industry is amongst the most heavily regulated industries in Europe. We have things like the FCA and FOS etc........other EU countries have very little like this.
The new directive is actually aimed more at bringing EU countries advice and regulation procedures in line with the UK, not the other way round. The idea is that if you want financial advice in one country, you will be advised under the same framework of regulation as you would be in another EU country.
Very little will change for UK consumers. BTL lenders have been asking for minimum incomes for a number of years since the credit crunch. Some BTL lenders actually already limit your BTL lending based on your income so affordability based BTL lending is already here, for example Clydesdale's lending criteria states;
"This will be assessed as if we were the lender on the client's residential mortgage. This means that, as a guide, the residential mortgage should be no more than 4.5 x income, dependant on individual affordability."
The key is obviously knowing your lender before you are applying, which is where a good Broker can be beneficial
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