"These cases are also often extremely worthwhile financially, so getting them right and giving the client all the options is very important."
So, how do lenders assess the ongoing purchase mortgage on a let-to-buy case? As usual, in many different ways!
A recent case study on MBT Affordability showed a range from £136,500 to £446,200 in the amount that lenders were willing to advance. And the bottom figure was from a top three lender!
Some lenders are happy that the existing property will ‘wash its face’ from the rental income perspective, while others take the actual monthly repayment as a commitment. Some lenders have their own calculation for the remaining loan, and some aggregate the two loans on the basis that the property isn't let yet.
The amount a client can borrow also depends on whether the existing loan is on a repayment basis or being remortgaged onto a let-to-buy product on an interest-only basis.
There is clearly a lot to consider, but these cases are also often extremely worthwhile financially, so getting them right and giving the client all the options is very important.
This is where an affordability platform like MBT Affordability can take the strain, making it very easy for you to provide information about the different options that are available to your client, without you having to manually trawl through the calculators of multiple lenders.
