In addition to analysing rental yields, returns on equity and providing monthly mortgage payment illustrations, the system now checks the lenders detailed lending criteria prior to offering two illustrations for every product.
Mark Alexander, Managing Director said: "As interest rates and rental yields come closer together, lenders rental income criteria is often tested to its limits. Additionally, investors are becoming wise to the effects of gearing and therefore, most are interested in borrowing as much as possible. To accommodate these requirements we have added a significant number of checks and balances to the functionality of our online quote-engine to ensure that our clients are only provided with mortgage illustrations which match the lenders criteria. This will obviously spare many applicants the disappointment of realising that a higher than originally anticipated deposit is needed before money is spent on valuations and searches."
Buy-to-Let mortgages are rarely based on earned income, however, lenders do base their criteria on a number of other considerations:-
LOAN REQUESTED, following the recent upgrading of the web-site an illustration is only offered by The Money Centre following checks on: maximum loan value, minimum loan value, minimum property value, loan to value banding, rental income, stress loading and stress rates, e.g. 125% interest cover at a notional rate of 6.5%. If the loan requested is lower than the lenders minimum loan , the lenders minimum loan is offered. If rental income doesn't support the requested loan the maximum loan affordable according to criteria will be offered. If the loan requested exceeds LTV then the maximum permissible loan is offered. If the requested loan is lower than the minimum loan and the property value is less than the minimum property value simply does not display that product.
The GET QUOTE system now also offers:-
MAXIMUM LOAN AVAILABLE, an illustration is offered subject to checks on: maximum loan value, minimum loan value, max loan not less than loan requested, minimum property value, loan to value banding, rental income sufficient, subject to stress rates and stress loading, e.g. 125% interest cover at a notional rate of 6.5%.
Mark Alexander went on to say: "Many investors do not realise that maximum borrowing significantly increases potential returns on equity in terms of capital growth. Additionally, if the rental yield is greater than the interest rate, maximum borrowing also increases income based returns on equity. This can easily be tested by investors anywhere they can get access to an online PC. Better still, it doesn't cost them a penny!"
