Being flexible with maximum loan calculations.
For an SSC or a Single Self Contained purchased on personal name, there are approximately 50 lenders. Current maximum fee on a Single Self Contained BTL purchased in personal name, can be as high as 7% with lenders like CHL, Vida, West One. Specifically when the maximum loan is required.
Often a little bit of flexibility can save the investor £1000s. It may be a small increase in deposit or using a lender that accepts market rent rather than the AST rent or different criteria. But it is difficult for most brokers to identify how small variations can affect the loan amount from 50 lenders as there is no tool available on any of the widely used search systems. So it can be a very time consuming exercise and most brokers tend to stay with a small range of lenders.
In the data set 5 year fixed, which provide the maximum loan, we can see the maximum is 412,500 with a fee of £28,875 from Vida on the 5 year deal. However, TMW offer a lower rate and fee for additional £7,000 of deposit, in other words a saving of £9,000 on fees.
Maximum loan Personal BRT / SSC
Calculation: Example based on Property: £550,000 / Rent: £1900 / LTV: 75% / Term: 25y / Basic Rate Tax payer / Property type: SSC/ Purchase
Compare it to a low fee deal. If the fee is 1% fee (low) or less, the maximum LTV will fall to under 60%. This is the level many of the high street lenders operate at. Specialist lenders also offer low fee deals but the rates are relatively higher. But are useful when the transaction is criterial driven.
Fee under 1% of loan
