Property Portfolio Financing
Professional investors based overseas and private landlords such as expats based internationally with more than one buy to let property often require specialist funding to enable them to expand their property portfolio and ensure it is delivering the best returns possible.
Using separate buy to let mortgages on each individual property can not only be more expensive than alternative funding but can also restrict the ability of the investor to leverage the full extent of their borrowing power. Using portfolio financing and portfolio refinancing can help to reduce costs as well as spread the risk across a range of properties and maximise the potential for returns.
At Premier Expat Mortgages we have years of experience of working with overseas investors and landlords holding or purchasing property in the United Kingdom by helping them to fund their buy to let portfolios. Whether they have two properties or 100+ we have access to specialist lenders and private banks that can provide funding based on their entire property portfolio financing.
What Is Property Portfolio Financing and Refinancing And What Are The Benefits?
Landlords can secure buy to let portfolio finance on all types of property including student lets, houses with multi occupants, (HMO’s), professional lets, company lets, short leasehold properties, and more. There are a number of benefits to obtaining such finance including:
- One mortgage account and one direct debit.
- Allows you to borrow above the value of an individual property.
- Possibility to calculate the overall rental income percentage over your entire portfolio to support additional property purchases.
- Makes future remortgaging significantly easier if you only have one account to consider.
What is a portfolio mortgage?
A portfolio mortgage is a product designed for buy-to-let landlords with multiple investment properties. It allows them to take out a single mortgage to cover all of their properties, rather than have multiple mortgages to service.
How does a portfolio mortgage work?
You can use a portfolio mortgage to hold all your buy-to-let mortgages under one mortgage umbrella.
It’s treated as one account, so instead of having separate lenders for each mortgage or property, the whole portfolio is managed by one lender with one monthly payment and one statement.
The portfolio is registered as a limited company and all costs and finances are treated as they would be with any other business.
From a lender’s point of view, a landlord would need a minimum of four properties to be eligible for a portfolio mortgage.
How many buy-to-let mortgages can I have?
As long as you meet the criteria, there’s no limit to the maximum number of buy-to-let mortgages you can have.
Different lenders may have their own rules about the maximum number of loans they can advance to an individual, but there are many portfolio mortgage lenders in the market that want to help you to grow your investment.
If you’re looking to grow your buy-to-let investment portfolio, it’s important to get your paperwork in order and keep an up-to-date spreadsheet of your property portfolio, so that you have all the information readily available.
How can I get buy-to-let mortgages for multiple properties?
If you’re looking to increase your buy-to-let portfolio lending, a conversation with an expat mortgage advisor will help you to understand the best way for you to take on multiple buy-to-lets, taking your full circumstances into account.
One of the options available to you will be to purchase buy-to-let properties using a limited company rather than in your own name.
Should I get a portfolio mortgage through a limited company?
In some circumstances, it can be beneficial for tax reasons for buy-to-let investors to finance multiple buy-to-let mortgages using a limited company.
There are two types of limited company: a trading company, or a special purpose vehicle (SPV).
The most common way for buy-to-let investors to buy with a limited company is with an SPV. There are many more lenders in this part of the market than there used to be and there are plenty of portfolio lending options for both.
Therefore, buy-to-let mortgages for limited companies are now often available at similar rates for individuals looking for multiple buy-to-let mortgages.
Buy-to-let mortgage lenders for limited companies will often apply a lower minimum rental stress test than they do for individuals who are higher rate taxpayers, because of the tax advantages associated with buying and managing through a limited company.
How many buy-to-let mortgages can I get using a limited company?
There are no limits to the number of buy-to-let mortgages you can hold within a limited company mortgages. However, the same rules will apply when a lender is assessing your entire portfolio as part of the application, and some lenders have a limit on the exposure they are willing to take for one company and can restrict the total number of mortgages or properties.
How can I finance a buy-to-let portfolio?
There are plenty of mortgage lenders that want to help landlords secure portfolio mortgages to simplify their finances and potentially increase the size of their investment.
Whether you’re looking for a second buy-to-let mortgage or to build a large portfolio, there are a couple of things you should think about.
Which lenders offer portfolio mortgage?
Portfolio mortgages are offered by a variety of lenders, and each lender has its own lending criteria that must be met by the applicant.
A select number of high street mortgage lenders can also consider portfolio mortgage applications. These include:
Consider client’s personal and rental income as well as ongoing credit commitments. Underwriters will assess speed of portfolio build and capital appreciation, tenant quality and occupancy levels, use of letting/management agents, portfolio strategy and future funding requirements.