If you are a landlord who is looking to buy more properties then a buy to let portfolio mortgage could be for you. These are mortgages which available from The Mortgage Works as well as other BTL mortgage lenders. Equity can be utilised across the entire portfolio of properties and this can make all the difference to a landlord who is looking to expand their properties. When considering a portfolio mortgage the lender can look and see which other properties a landlord has mortgaged with them and take into account the rental and equity on them when making a decision on the mortgage.
Pros and cons of a portfolio mortgage
As with any types of mortgages there are, of course pros and cons to having a portfolio mortgage here are a few things to consider,
Pros
You could borrow more than a property's value - this is because loan to value and rental income is averaged throughout the portfolio. This means that any excess rental income or equity in a property within the portfolio can help to support buying another property. A mortgage portfolio is seen as one mortgage account and treated accordingly - so there is only one mortgage payment, one mortgage statement and one direct debit mandate for all the properties in the portfolio. Some of the BTL portfolio mortgage lenders will allow the landlord to borrow up to 75% of the portfolio's value without having to prove the income gained through rental. Only one advance needed to expand the portfolio - when a landlord wants to buy a new property they only need one further advance in order to utilise the equity held in the portfolio.
Cons
If one or more of the properties underperforms substantially it means that the landlord has to make up this shortfall. If this carries on over time it could have an impact on the equity in the portfolio. If you are a landlord then a portfolio mortgage could be for you, but if you existing buy to let mortgages are not with a lender that offers these types of mortgage you will need to pay to switch these mortgage to the new portfolio mortgage lender. This can mean paying for a new survey on each property and solicitors fees. With today's falling housing market this could mean that taking a portfolio mortgage may not be right for many people as their equity in their properties will have reduced.
Portfolio mortgage advice
For more information on buy to let mortgage it is advisable to speak to a professional mortgage advisors to answer all your questions on getting a portfolio mortgage. As the availability will dependent upon the value of your buy to let properties it is important to have up to date valuations and rental assessments before contacting the advisor.
