2nd BTL referred/declined

Thrugelmir

The lender may not like the purpose of the equity withdrawl. As increases their risk exposure considerably. Days of leveraging property akin to an ATM may well be drawing to a close at least from mainstream lenders.

BM solutions is part of Lloyds Bank. Historically one of the let's say more conservative lenders in terms of risk profile.

Vales

Interesting, I had no idea that BM was one of the more traditional
Are you saying that they were happy for me to get my equity to - say - go on holiday or pay for something else - but not to invest into another property?

Sorry if I sound naive or maybe I am just not in touch with the times

Thrugelmir

Vales wrote: »

Are you saying that they were happy for me to get my equity to - say - go on holiday or pay for something else - but not to invest into another property?

Sorry if I sound naive or maybe I am just not in touch with the times

When did you last MEW? (Mortgage equity withdrawl).

Vales

Never… I still have my original deal (which is a great one)


Its all gone tits up and I am loosing the flat that I wanted
I ll see a second broker today but I doubt he can rescue the situation as they are not offering 75% but just 50% of first property
very sad

silvercar

Would it be possible to mortgage your residential home? I guess not being on the electoral role may prevent that.

Could it be that the lender sees you releasing equity from one property to use as a deposit on the next, and by funding both from the same lender, it looks like they are giving 100% of the money? I know that overall there is equity, but it could make a lender feel that you are putting in 0 and they are funding 100%.

holly_hobby

If your existing BTL mge with BM is also circa 284k (which may be the case if I've read this right, with the recent equity release exercise of 224k from it), thats possibly where your primary issue lies.

As where your total BTL exposure across the LLoyds group will exceed 500k, its referred to their specalist underwriting team (ie its gone through with a very fine tooth comb !) - with a top lending ceiling of £3m across the group for portfolio landlords.

And whilst the ltv may be low (with plenty of equity), the 2nd mge you're after is still a v substantial amount (esp with a combined hefty exposure of the 2 btl mges you'll have with them), and is still a meaty chunk where there's any risk of default (and BTL properties do statistically have a higher default rate, by the sheer fact that its not the mortgagors main residence, so in times of financial difficulty servicing such debts can sometimes be put to 1 side by the indvidual).

So on referral, if the UW believes that its in an area where it may be hard(er) to let, and/or there isn't sufficient diversification re area and property type, and/or the property is a niche property/too high a rental income is needed to service the debt, which may not be achieveable longterm/ or from a wide audience on the open market (which they'll also be guided by their surveyors), are a few examples re issues that can influence a decline - and no they do not have to tell you - but in reality they will often give the broker a broad idea/heads up of what the essential issues are.

Additionally, an AIP does not include a full status check, and having conducted one on submission of the full application, there may be payment profile blips revealled, such as defaults, missed or a history of late payments, over in debtiness, issues with un-reported/linked addresses, absence of VR history, etc, etc. Although I wouldn't expect with you alrady being with BM, that you not currently being the VR would be a straight decline. However they may be concerned if you have lived at your current address for a while, excatly why you are still keeping yourself off, as it is a legal requirement to respond to electoral registration, ie be on the VR at your home address (although its not enforced TBH).

Have you obtained your credit reports (experian, equifax,callcredit), and ensured that everything there is accurate, as if thats all clean, its the exposure itself they don't like.

If you have a broker, then get them (as they should be already) to establish what the issues are, if there is anything you can do to remedy them and have the case re-assessed, or if its a dead do-do and you need to move onto another lender, or re-think your plan (eg - pch for cash, seek a lower value property, etc).

Hope this helps

Holly xx