Poor credit Buy to Let loans – up to 80% LTV
25th October 2023
By Alex Walker
Poor credit Buy to Let loans – up to 80% LTV
This poor credit loan is for both, buy to let and residential borrowers. Loans are available on a second charge basis, which gives borrowers an option for credit repair or capital raising, without losing the existing deal on their current mortgage.
Many property investors, and sometimes their brokers, overlook second charges as a potential solution. There are a number of secured loans for BTL investors, offering prime rates and some great features, such as flexible overdrafts.
This article deals mainly with Buy to Let loans, where the borrower has a poor credit history. There is a range of options available, accepting varying degrees of poor credit including mortgage arrears, CCJ’s, defaults and IVA’s.
However, don’t assume because you have a low credit score, that you have poor credit. Some lenders don’t actually look at your credit score, so you might get lower rates. These products are aimed at those with CCJ’s, mortgage arrears, defaults – even previous bankrupts. The loan to value available and rates of interest will be determined by the level of poor credit and it’s recency. These are a sample from one lender at the time of publishing.
80% LTV poor credit loans are available for any amount of previous arrears, CCJ’s, defaults and payday loans subject to:
- No CCJ’s or defaults registered in the last 3 months
- No current arrears and none missed in the last 3 months
- Haven’t taken out any payday loans in the last 3 months
- Any Debt Management plan must be active for 12 months and well maintained
- Minimum valuation £150K – (75% LTV available with minimum value of £100K)
- A reasonable explanation to support no recurrence likely
- Normal affordability checks for employed and self employed applicants
Please Note
- Available on BTL’s and Residential
- No credit score
- Any amounts of adverse over 3 months old normally accepted
- any unsecured arrears normally accepted
- Rate is 9.65% variable for 80% with heavy previous adverse
- Second charge only – max loan £45,000
- 75% LTV poor credit loans are available subject to additional terms:
- A maximum of 2 months current mortgage arrears
- Annulment of bankruptcies allowed
- no limit on CCJ’s, defaults and payday loans
- max loan £100,000 – rates from 10.5% variable
- 70% LTV
- Up to 6 months current arrears considered
- max loan £75,000
This 80% LTV product can be used for credit repair or where funds are required at a high LTV but there is recent adverse. Bear in mind, however, the early repayment charges are 3 months interest in the first year reducing by 1 month each year. This needs to be considered if the plan is to credit repair and remortgage.
Always speak to a specialist to ensure the terms are fully understood
New BTL Loan
Commercial Mortgages – rates and terms Feb 2022 intermediary
Help to Buy – Previously Owned Properties
Development finance explained
Promise Money is a broker not a lender. Therefore we offer lenders representing the whole of market for mortgages, secured loans, bridging finance, commercial mortgages and development finance. These loans are secured on property and subject to the borrowers status. We may receive commissions that will vary depending on the lender, product, or other permissable factors. The nature of any commission will be confirmed to you before you proceed.
More than 50% of borrowers receive offers better than our representative examples
The %APR rate you will be offered is dependent on your personal circumstances.
Mortgages and Remortgages
Representative example
Borrow £270,000 over 300 months at 7.1% APRC representative at a fixed rate of 4.79% for 60 months at £1,539.39 per month and thereafter 240 instalments of £2050.55 at 8.49% or the lender’s current variable rate at the time. The total charge for credit is £317,807.66 which includes £2,500 advice / processing fees and £125 application fee. Total repayable £587,807.66
Secured / Second Charge Loans
Representative example
Borrow £62,000 over 180 months at 9.9% APRC representative at a fixed rate of 7.85% for 60 months at £622.09 per month and thereafter 120 instalments of £667.54 at 9.49% or the lender’s current variable rate at the time. The total charge for credit is £55,730.20 which includes £2,660 advice / processing fees and £125 application fee. Total repayable £117,730.20
Unsecured Loans
Representative example
Annual Interest Rate (fixed) is 49.7% p.a. with a Representative 49.7% APR, based on borrowing £5,000 and repaying this over 36 monthly repayments. Monthly repayment is £243.57 with a total amount repayable of £8,768.52 which includes the total interest repayable of £3,768.52.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME
REPAYING YOUR DEBTS OVER A LONGER PERIOD CAN REDUCE YOUR PAYMENTS BUT COULD INCREASE THE TOTAL INTEREST YOU PAY. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.
Promise Money is a trading style of Promise Solutions Ltd – Company number 04822774Promise Solutions, Fullard House, Neachells Lane, Wolverhampton, WV11 3QG
Authorised and regulated by the Financial Conduct Authority – Number 681423The Financial Conduct Authority does not regulate some forms of commercial / buy-to-let mortgages
Website www.promisemoney.co.uk