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Secured loans on rented property
Does anyone know of a reputable bank that would give a secured loan on a property that is rented out? Although I have a mortgage on my flat, it is rented out to a Housing Association with guaranteed income, but i find that lenders are refusing my application for a secured loan based on the fact that i don't live in the flat. Any ideas?
Thanks
Glow
Thanks
Glow
0
Comments
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The difficulty is that should you default on your loan the bank/loan company would have a lot of bother and expense to evict your tenant before selling.0
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Not too sure about banks, but there are plenty of companies out there who would lend on it. When you secured finance on a BTL most lenders restrict the LTV to about 70-80%. The tenant would need to sign an occupiers' consent form telling them what would happen should you default and the property be taken from you. Some lenders also work on the income being 130% of the mortgage and secured loan payment added together. Eg: If your mortgage is £700 and the secured loan £300 then you'd have to be receiving £1,300 per month in rent.0
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