Are you a doctor, over 30 and with 2 or 3 properties?
You are now the preferred breed to mortgage lenders than first time buyers. I talked about this happening 3 years ago where lenders would simply favour a professional person who has a history of paying debt over a first time buyer.
Currently better rates and better Loan To Values are on offer to residential buyers over buy to let buyers. You can get 90% LTV residential (even 95% in some circumstances) and the rates can be sub 4%. Compare this to the investor where the max LTV is 75% and rates are always over 4%.
The thinking behind this is a traditional one. A residential owner is more likely to pay their mortgage over an investor. This is because the residential owner will beg, steal or borrow to keep the roof over their head. Compare this with an investor who will simply see a column on their spreadsheet disappear if they stop paying the mortgage!
Now I have always thought this was simplistic thinking. There are some people who you can lend to 120% LTV as they are smart. There are others who you could not lend to 50% LTV as they are not so smart. But who am I to argue with these banks? They evaluate risk all day so they must know, right?
However the products are now emerging. There is preferred lending to mature professional experienced investors. That is to say:
Own 2 or more properties
They appear to be a safer risk at the moment. There are lenders who would rather lend to someone like described above than a first time buyer looking for a place to live.
The criteria will widen. They will probably drop the “2 or more properties” and then widen out to anyone who earns in excess of £50k and then drop the age to 25 and then who knows……we could see the credit crunch completely disappear for investors and actually REMAIN for the first time buyer.
Have a read of this article which talks about exactly what I have said above.
PS if you want to get in on the action request a call back!
Posted on: 21st Jan 2010