Have you heard about the New Mortgage Changes? Are you now terrified that you will not ever meet the criteria for buying another buy-to-let? Let me help you.
A lot of my clients are terrified about the new changes and it’s something I am being repeatedly asked about.
New Mortgage Changes
As of the 1st January 2017 the rules are changing. Lenders must ensure that a Landlords rent covered 125% of their monthly mortgage payments.
That’s a lot of rent to be bringing in.
Worse still, there is speculation that because of the new tax changes to interest rate relief lenders could put in place a more difficult test. It could rise to being 145% of new monthly mortgage pages at an interest rate of 5.5%.
That’s high right? How do you even know if a property you are looking at falls into that category?
This is a fear that could supper the dreams of many a Landlord.
Unless… you know how to deal with it…
One Simple Tool
Actually, I fully believe that there are still great deals out there to be had. AND, you will definitely still be able to go out there and find great investments.
All you need is one very simple tweak to your investment pipeline.
A really straight forward spreadsheet which will give you a first point indication as to whether a property is worth pursuing further.
At the moment the only information you will need is the purchase price, and the anticipated rent (WORST CASE SCENARIO HERE GUYS, DON’T OVER EGG IT), and the spreadsheet will do the rest for you.
It’s not a hard and fast answer to whether you will get a mortgage, but it is an indicator of whether you will pass the speculative new rules. And, it will save you a huge amount of time because you can go right ahead and disregard any properties which don’t fit the bill.
So, what do you think of the new changes? How is the spreadsheet helping your investment journey? Let me know in the comments section below.
NC
