This is a single loan facility, secured by multiple residential investment properties – sometimes called a pot facility. These can include all a mixture of acceptable property types (Simple, HMO, MUFB).
These are single loans secured by a single property which could form part of a larger portfolio. In most cases all properties are dealt with at once when it comes to financing although larger portfolios can be split.
We are often asked to refinance and raise additional cash from the equities of the properties at the same time, which we can do subject to LTV constraints. This is know as Equity Release.
Loans are typically capped at 75% loan to value (LTV) of the combined portfolio. Loans are available on interest only terms, or on capital and interest repayment terms.
The affordability of the loan is based on the rental income the portfolio generates. Top slicing is not available in these cases.
Pricing of these facilities can vary greatly, and it is often linked to the combined loan to value (LTV) and credit quality of the linked individuals. Interest rates are available in the range of 2.5-6.5% per annum. Fixed rates are available. Arrangement fees are in the range of 1.5-2% of the loan amount which can be added to the facility.
All portfolio loans go through a rigorous bank underwrite, with loans being offered subject to valuation and completion of security. There is sometimes more flexibility when it comes to choosing Solicitors, however the valuation process will be driven by the bank from their pre-approved panel.
Acceptable customer types include: Sole Trader, Partnership, Limited Company (Ltd) or Limited Liability Partnership (LLP).
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