The Mortgage Works has outlined its approach to portfolio buy-to-let ahead of new underwriting rules coming into force on 30 September affecting those with at least four mortgaged properties.
For portfolio cases the interest cover ratio will be 145%, while it will remain at 170% for HMOs regardless of a landlord’s tax status.
TMW is investing in an online system allowing brokers to fill in portfolio details on their existing mortgage applications which are validated and sent to the underwriting team.
The lender will ask questions at the decision in principle stage to identify portfolio landlords.
After that it will ask for the income on all portfolio cases, though proof will only be required when requested by an underwriter.
There will be no changes to loan-to-value limits, maximum loan size or minimum income criteria, while stress rates and the number of properties accepted will stay the same.
Paul Wootton, managing director of TMW, said: “Following the confirmation of our commitment to supporting portfolio landlords and intermediary partners through the transition to the new PRA underwriting standard, we are now providing further detail on how we are going to address such cases.
“This is to give the clarity landlords and brokers need to help them with their planning at a time of ongoing change for the buy to let sector.”
If customers have or will have four or more mortgaged properties, there are additional questions about the value, rental income and outstanding mortgage balances secured against the whole portfolio.
Meanwhile TMW said it may ask for more information depending on how complex the case is.
In some cases the lender will ask for a business plan, including how long the properties have been owned, as well as the landlord’s current approach and future plans of portfolio management.