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Singing Pig » Property Investment Forum » Property Market Discussion » Commercial Portfolio Loans vs BTL mortgages

    

Commercial Portfolio Loans vs BTL mortgages

Last post 12 Jul 2008, 3:50 PM by Lisa. 3 replies.
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  •  06 Jul 2008, 9:03 PM 529500

    Commercial Portfolio Loans vs BTL mortgages

    Since BTL mortgages have become so expensive - perhaps now is the time to start looking at  using a commercial loan instead multiple BTL mortgage products ? In the past , I decided against using this type of finance arrangement because individual BTL mortgages proved to be less expensive - However with the recent changes , I wonder if a commercial loan which encompassed the whole portfolio would not be more appropriate - Does anyone have good experiences of using this type of portfolio funding ?

     

    Appreciate all inputs ,

    Thanks,

    Sean

    West Lothian Property Solutions
    www.wlprops.com
    Letting Agent and Rent Back Specialist - We source Rentback Opportunities in West Lothian - 10 Miles from Edinburgh.

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  •  07 Jul 2008, 11:54 AM 529844 in reply to 529500

    Re: Commercial Portfolio Loans vs BTL mortgages

    Hi Sean,

     

    The commercial market hasn’t been immune to the crunch either. Salt were one of the biggest and best and have withdrawn all commercial lending but will still do resi. From my recent research most commercial lenders are looking at LTVs of 60-70% max at present and rates are in region of 3 over base.

     

    Lisa

     

     

    Life is not measured by the number of breaths we take, but by the moments that take our breath away.

  •  08 Jul 2008, 9:33 AM 530694 in reply to 529844

    Re: Commercial Portfolio Loans vs BTL mortgages

    Well that scuppers that plan ! I'm finding that a typical BTL mortgage is around 7% these days - when fees are taken into consideration . I think more and more of my mortgages will revert to the SVR ( Base + 1.5 or 1.75 % ) which is probably quite attractive now .

    It appears to me that residential mortgages are now a full % or more lower than BTL mortgage products - whereas they used to be quite similar . Is that right ? If so ,  I cant help thinking that the Lenders are withdrawing from BTL , in a bid to take out a lot of speculation in the property market which has driven prices up too high .

    Would you agree with that ? If so , surely some of the lenders will return to more competitive pricing for BTL products at some point - given that many experienced landlords must be seen to be creditworthy - even if they do make a 25% deposit the standard instead of 15 % ? If not , then either rents will have to increase or lots more landlords will be forced to sell up - certainly BTL growth will have to stop .

    Appreciate your views ,

    Thanks,

    Sean

    West Lothian Property Solutions
    www.wlprops.com
    Letting Agent and Rent Back Specialist - We source Rentback Opportunities in West Lothian - 10 Miles from Edinburgh.

  •  12 Jul 2008, 3:50 PM 534425 in reply to 530694

    Re: Commercial Portfolio Loans vs BTL mortgages

    Hi Sean,

     

    Who the heck knows!!! We can all speculate but we are where we are and we have to work with what we have!

     

    I’m certainly sticking with any SVRs we end up with at the moment. Once you look at set up fees, val fees and legal fees refinancing is a heck of a lot more expensive plus the hassle of doing it and the stress of potential down vals my approach is just to ride it out and let other cash flowing properties take the heat for the moment.

     

    It will sort itself out and confidence will return. My personal viewpoint is that the lenders want to shake out as much of the crap as quickly as possible and they don’t want the current situation to be drawn out either.

     

    With bad business its a lets get rid of it as quick as possible approach and with the good business it’s a lets cash in as much as we can approach.

     

    Once the crap has come through the mire (bad buy to let decisions, sub prime, new builds etc) then things will start to return to normal – it will be at least one full economic year that’s for sure because only when the markets have seen the worst on offer will they start to believe the industries are worth investing in again.

     

    All my offers are based on 8% - if it won’t work at that I won’t do it.

     

    Staying on SVRs and working off 8% means that when things stabilise I should be a lot better off but how long that will take is really anyone’s guess despite their crystal ball predictions!

     

    Rents are edging upwards and even if we slip into a recession so many people are sitting tight and choosing to rent and so many are withdrawing or being forced out of buy to let (selling, repos) that its inevitable demand will increase.

     

    Its fairly normal activity just sparked by more unusual events. As rents start to come in line with affordability of mortgages then people will choose to buy instead and rents will stabilise. Then people will realise its cheaper to rent or something outside of our immediate control (wars, recessions, credit crunches, etc) stop people from buying and they opt to rent – this forces up rents and away we go again!

      

    Lisa

     

     
    Life is not measured by the number of breaths we take, but by the moments that take our breath away.
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