One thing I am sure of is lenders do not want to lend. The credit crunch is not over and they are putting so many restrictions to my clients it really frustrates me.
It seems people wishing to build a modest property portfolio can fit in to 4 broad categories as set by the lenders:
Now they measure you on 3 key things:
They look to see if you have savings in excess of £25k, an income greater than £25k and that you have never missed a loan repayment in your whole life! So looking at these criteria you can find yourself sitting in one of four categories:
So looking at the far right column if you have missed any mortgage or loan repayments in the past then you are considered bad. Bad means no loans or mortgages for you currently but maybe in the future when the mortgage market recovers and your history drops off.
Looking at the far left column this is where you stand a chance, but only a chance (!), of getting some finance. If you are in this category you can buy virtually any property without much restriction on yield, BMV or location.
Even though you do not need to use your savings you can prove you have deposits and hence buy, buy and BUY!
If you are in this category you are in a very fortunate position and I would make full advantage of it while it lasts. You can hoover up as many deals as you like without actually spending any of your savings.
If you are in the next two categories you have to buy at decent yields and have to put down a bit of moneyThere are fewer and fewer lenders however you will be able to get a 70% LTV buy to let mortgage quite comfortably. . You can still buy no deposit down but there will be more costs as the lenders you will be going for will be niche.
If you are in the last category then to be blunt you will struggle. Nothing is impossible but I think you will find it hard to buy. However if you are up for the challenge please take it on and let me know how you get on. The good thing is you can still make money in property without the need to get a mortgage.
You simply supply all the people who have good credit with deals! My How To Be A Property Sourcer course is being written as we speak. I cannot wait for its launch. I am thinking of holding it at the Gherkin building, London or somewhere posh like that.
It will be a great way we can become even richer but TOGETHER!
Posted on: 28th Apr 2010