Managing buy to let affordability for a portfolio landlord can be tricky. Accurate recommendations require up to date portfolio data, and borrowing on one property can have negative repercussions for the overall portfolio affordability. How do you make sense of this? BrokerSense Buy To Let Affordability makes this simple
The scenario is likely one that has frustrated many brokers grappling with the new portfolo rules for buy to let affordability. The client has a highly geared selection of property. They want to release equity oto invest in new property. Raising the borrowing on the portfolio adversely affect their ability to borrow on the new property however. How do you shortlist the lenders that will give the most lending for the lowest amount of money? Making these calculations can be maddening, each adjustment to the portfolio borrroing must be calculated based on each lenders interest coverage ratio (ICR). Doing this manually can involve messy spreadsheets and a lot of notes, and remembering which was the best solution can be a challenge.
BrokerSense makes buy to let affordability simple however. Upload your clients spreadsheet in a few clicks and you are presented with a beautiful visialisation of your clients portfolio complete with sliders to adjust on the fly. The process is so efficient you can do this with your client in real time and give them the information they need instantly, vastly increasing your value to the client.
Using the portfolio manager is simple. The graph below shows lenders portfolio thresholds. In this case, working on an aggregate 75% LTV, the client has a comfortable amount of equity before they start to encounter issues with the portfolio buy to let affordability calculation. If they max this out then they have a potential £100k to draw on.
To see the effect on extra borrowing, simply slide up the value of the loan on one of the properties and instantly see which lenders remain comfortable with the overall borrowing, and watch the number of lenders available for the security address. Once this number drops below a threshold you can define, you can then run a full affordability search that takes into account manay ore factors such as income, outgoings, commitmentas and other costs. It even then factors in top slicing, so lenders typically out of reach based on rent would be revealed should the client have sufficient diposable income.
Once you found the perfect balance of lending, you can simply export the spreadsheet again for your compliance file and for review by the client, or as a pre formatted portfolio spreadsheet for a number of major BTL lenders, with many more to follow soon.