Most frequent questions and answers
An SPV will be a limited company that owns properties for the purpose of letting. This is popular amongst buy-to-let lenders as there are no complications or liabilities created by other activities.
The principle activity of an SPV is determined by its SIC code.
The main SIC codes accepted are below;
68100 Buy & selling of own real estate
68209 Other letting and operating of own or leased real estate
68310 Real estate agencies
68320 Management of real estate ona fee or contract basis
Whilst there are some lenders that do have minimum incomes / joint incomes – there are also lenders that do not have a minimum requirement and undertake a ‘common sense’ approach when determining affordability.
Criteria is vast and lender dependant – here at VIBE we have a wide-ranging lender panel for all types of scenarios. Each case is assessed on it’s own merits.
If works are being undertaken, you/your broker will need to make the lender aware as early as possible, ideally upon application so as not to be in breach of your mortgage conditions on completion and to avoid any unnecessary costs if term finance cannot be obtained.
Depending on the level of work involved, the lender(s) will usually insist you obtain short term finance initially (bridging loan) where you can either fund the works yourself or; some lenders also fund 100% of the cost of works as well as contributing towards the initial purchase price / day 1 value.
Please note that if a valuer deems the property to be uninhabitable – the valuation may come back with a nil value and the lender can insist you obtain short term finance.
Yes, providing you have a Buy to Let mortgage in place then the security can be let as soon as you are ready.
You will need to obtain consent from the mortgage lender to see if this is possible. Standard Buy to Let mortgages are not regulated and so if you do decide to reside in the property, this will make it a regulated loan and so you will need to switch to a regulated mortgage prior to you moving in.
Yes, Buy to Let mortgages can be more expensive than main residential regulated loans however Buy to Let rates are currently at an all time low and there is not much difference between the two!
You will need to either obtain Consent to Let (obtaining permission) from the first charge mortgage lender or, in the event you cannot obtain Consent to Let, you will need to switch to a Buy to Let mortgage so that you are not against your existing mortgage conditions.
Yes, you can – you have several options; you can re-mortgage so that you raise the equity required or if you are already tied into a mortgage where you will be charged an Early Repayment Charge if you were to redeem the loan, then you can speak to the lender to see if a further advance is possible.
You also have an option of a Second Charge mortgage if there is enough equity in your home – if the full amount of the second charge is being raised solely for an investment property it is classed as a business loan and as such, it is not classed as a regulated loan (best to speak to a qualified mortgage broker to establish the most suitable way of raising finance)
A Consumer Buy to Let loan has become known as the product for an accidental landlord. This type of product can only be used where the security is your only rental property and is not rented to a related party.
Examples of where a Consumer Buy to Let loan may apply are:
– When you wish to use a property as security which you purchased and used to live in. This is quite common for young married couples who both owned properties prior to getting married leaving one property empty.
– When you wish to use a property as security which you have been gifted. It is not uncommon for family and friends to gift property whilst they are alive as part of inheritance tax planning or for any other reason.
– When you wish to use a property as security which you have inherited.
You will need to obtain permission from your mortgage lender if a family member intends to occupy as there is extremely limited appetite from lenders due to various reasons below;
– Buy to Lets are effectively businesses – mortgage lenders want to ensure they are being run on a commercial basis
– There is a possibility that the rent paid by a family member will be under market value
– The mortgage will be classed as regulated by the Financial Conduct Authority if a family member is to occupy and so you will require a regulated Buy to Let mortgage. What this means is that the lender and mortgage broker have to justify their recommendations in terms of suitability and affordability.
Please note VIBE Finance cannot arrange regulated mortgage finance and so regulated mortgage advice will need to be sought.