Increased offer from lender if I go through broker?

gordon_retundo

Hi guys,
Have a question about a bit of a pickle I'm in.
I went to a high street bank and we crunched some numbers with regards to what they could lend me for a BTL based on my circumstances.
The figure wasn't great, nowhere near what I need.
Unfortunately this is the only lender who will accept me due to a number of factors.
If I went to a broker, is there any possibility they can get considerably more from that lender (i.e. about 60% more)?
One broker seems convinced they can, another told me 'why would a bank lend more through an intermediary rather than direct? the max lending won't change, the only difference you may see would be in the rates.'
The 2nd seems the glaringly obvious answer. Just wanted confirmation from those in the know before I expend time/money/effort on a goose chase.
thanks in advance!

Dave_Ham

Impossible to answer without further information, often we see clients who have been to see bank "advisers" and we can achieve better results but depends on the differing factors.

Firstly, on a buy to let values are not typically limited on value to the same end as residential ones.

So, what are you looking to achieve and what are the mitigating factors?

gordon_retundo

thanks for the reply.

the lender apparently also looks at income as well as expected rent/value (natwest).
main limiting factors are it's my first purchase (no residential property) and my salary isn't great. it's over £25k which is what I've been told by a few people is the accepted minimum, but not over it by a great margin.

Dave_Ham

There are hardly any lenders that will lend on a buy to let without already being a homeowner.

It is then virtually almost driven by income, as historically people have used a buy to let to bridge lack of income.

Your rationale for buying a property that is not affordable to live in, will be questioned with any lender.

What amount are you trying to borrow?

GMS

What is the property worth?


How much did you want to borrow?


How much rent per month?


What is your current residential status?

gordon_retundo

Property worth £230k, looking for a 75% mortgage
I've been told that it's a strange situation - buying to let rather than buying to live in, but I won't be able to cover a repayment mortgage, household bills and living expenses if I lived in it, and I'd be moving from a (relative) palace to a (relative) dump as I'm currently living with family in a rather nice place.
Rent would be over a grand, so there's enough of a buffer there to cover repayments and additional expenses.

Dave_Ham

I think you are going to struggle if I am honest on these numbers.

Most lenders are going to assume you will just move in.

gordon_retundo

Yeah, I've had trouble convincing everyone that this is a genuine investment! I thought it sounds a bit counter-intuitive though, as I have to stump up considerably more in deposit. I guess the interest only option may look like an advantage.

So do you think that it's unlikely that if the branch offered me £110k that the broker would not be able to secure £185k from the same lender? thanks

Dave_Ham

I would never say never, assuming you are genuinely looking for a buy to let; why not add a parent to the mortgage as this would increase the pool of lenders and potentially work out.

Its the income multiples combined with the interest only which makes people try and beat the system I imagine, although lenders are rightly much more aware of this now.

GMS

Natwest have the 4 time income rule in place to prevent people getting around residential affordability.


convincing a lender that you want to put all of your savings into a property you won't live in whilst not owning one already is the difficulty.


Buy to Lets have different affordability rules from residential o whilst you would could fail affordability for a resi mortgage it may pass a BTL.


Lender could decline on the basis they believe you will reside there.


Other lenders don't have the same rules as Natwest but an underwriter may well take a dim view on it

Thrugelmir

gordon_retundo wrote: »

Yeah, I've had trouble convincing everyone that this is a genuine investment!

Probably because the numbers simply don't stack up.

You'd be better off finding somewhere affordable to live. That's one of the best investments you can make.