The mortgage, called House 2 House, is targeted at those whose rental income is not enough to qualify for a standard BTL mortgage, which requires that rental income covers up to 150% of a landlord’s mortgage payments. Instead of using rental income, the product uses the borrower’s own self-certificated income to calculate affordability.
Sue Cox, business manager at Bananas Inc, said: “There are a lot of budding property investors out there who, because of house price rises, cannot obtain finance because their rental income does not cover lenders’ mortgage payment multiples. They are unable to move forward because of the existing rules. This product is designed especially for them. It allows them to become a residential property investor by escaping the rental income proof. They only have to state their own income, for which we do not require any proof.”
The product tracks BBR until 31 December 2006 when it reverts to BBR plus 1.79%. There is no early redemption penalty and the maximum loan-to-value is 85%.
Flexible over and under payments and payment holidays are allowed. Single properties only are eligible. A Mortgage Indemnity Guarantee applies from 75%LTV and there is a £499 completion fee. The procuration rate is 0.5%.
