|
 Buy to Let mortgages are the latest products mooted to feel the cold embrace of government regulation, as they are now proposing to extend the remit of the FSA to include all such investment finance. This has in fact been on the cards for quite a while now and I dont think has come as too much of a surprise following the wave of regulation fever.
The impact of such a move shouldn't make too much of a difference from a mortgage advice point of view, (here at Resident Broker we treat buy to let mortgages in a similar way to regulated mortgages anyway), however it may have connotations from a lending point of view - after all if the concept of affordability is passed onto buy to let mortgages then it may tighten the amount lenders are prepared to lend to any one person. Better get those mortgages in quick then!
On the subject of the Financial Services Authority, I also read this week that the FSA will have to demonstrate its value to the National Audit Office next year - the FSA's current budget stands at a cool £437m a year. We have the greatest of respect for our regulatory masters and therefore have no comment to make.
And finally Kensington has today announced it is back in the market. Even though it will be a small re-entry, it is a good sign that the lender has managed to secure funds and is tentatively dipping their proverbial toe in the post-nuclear financial pond. Lets hope more will follow.
TIP OF THE WEEK 1: Proof of deposit and income.
It has become increasingly clear that many lenders need to see proof of deposit and sometimes proof of income (although there are still lenders who don't need/want proof of income). Even the ones that don't ask for it upfront can ask after the valuation has been carried out, or even later down the line after a formal mortgage offer.
To make sure this doesn't catch you out, we always advise the following:
- Make sure proof of income is readily available, should you be asked.
- Have proof of deposit available should you be asked by the broker/lender/solicitor. Proof of deposit is normally acceptable by way of a bank statement which shows a slow build up of funds or lump sums from certain transactions e.g. sale/remortgage of a property.
TIP OF THE WEEK 2: Looking for a buy to sell mortgage - and bypass normal rental income?
Let's say you have found a property where the rental income is low and the property needs some refurbishment work. We have a lender that, subject to provable income, can bypass the normal rental criteria that is usually needed.
You can buy the property, do whatever works need doing and then sell on without early redemption penalties.
Sound good? We thought so.
As always, call one of our advisors today for more information 01424 205 373
|