We are happy to consider a mortgage for an applicant who has existing properties (whether mortgaged or unencumbered).
Where the applicants have an existing/second residential property that has not been sold and there is reason to believe is not to be sold before completion (includes where held/to be held on a PTL basis), an application is acceptable subject to a *maximum LTV of 80% applying to the property being purchased providing:
- If the new property being purchased is for owner occupation
- The deposit is being funded from their own resources – this may include equity release from any existing properties they own
- If a detailed schedule of all properties owned is provided – covering addresses, lender details, outstanding mortgage amounts, monthly mortgage payments, current estimated valuation and details of the rental income being received if a property is Buy to Let
Where any existing property is either unencumbered or is held on a Buy to Let basis, it is acceptable to consider lending up to a maximum LTV of 90%.
If the other mortgage(s) held are on a Buy to Let (BTL) or Permission to Let (PTL) basis, then the commitments can be ignored. However, you will need to provide documentary evidence to confirm this.
For Buy to Let Mortgages, you will need to provide one of the following:
- A copy of the original BTL mortgage offer
- A letter from the lender confirming it is a BTL. If they hold any Woolwich BTL mortgages, simply detail the account numbers for us
For PTL Mortgages you will need to provide:
- A letter from the lender confirming this
Please note that additional documentation may be requested to ensure that we are satisfied that the BTL/PTL mortgage payment can be excluded from affordability – eg, a copy of the tenancy agreement.
Where the original loan can NOT be confirmed on a Buy to Let or Permission to Let basis
Any existing mortgage or secured loan which has not been evidenced as a Buy to Let/Permission to Let and will not be redeemed on completion of the new mortgage will be treated as follows:-
- For affordability purposes, the mortgage commitment on second properties will be calculated on a standard repayment basis over the outstanding mortgage term at the pay-rate or our stressed rate, whichever is the higher. Where a credit limit applies to the existing mortgage borrowing then it is this figure, including any undrawn monies, which should be used when assessing affordability.
- In addition, a fixed value commitment for each additional residential property needs to be applied to cover all other property costs. This is applied automatically by the system for residential mortgaged properties documented in MSO. Advisers need to add actual costs for non-mortgaged properties. This applies to all other residential properties i.e. second residential homes but not any property confirmed as being on a Buy to Let or Permission to Let
The maximum borrowing amount allowable will be determined by “verified allowable income” multiplied by “income multiple allowable” less any non-redeemed additional property mortgage balances other than those confirmed as Buy to Let/Permission to Let .