Alan Cleary - Managing Director of Precise Mortgages
Imagine you’re approached by a customer who wants to purchase a buy-to-let but is struggling to find a lender who will give them the mortgage they want.
Despite having a monthly disposable income which could comfortably cover any void periods, the rental value of the property means they can’t achieve the loan size they need.
If you were presented with this situation, would you know where to go for a solution to your customer’s problem?
Fortunately, our top slicing option means that, providing a customer has sufficient disposable income (this can include earned disposable income, surplus portfolio rental income, or a combination of the two) and the rental income on the property they are looking to purchase meets a minimum 110% interest coverage ratio at pay rate, they can use the surplus income to demonstrate they can meet any rental shortfall.
Top slicing is available across our entire buy-to-let range including to limited company and personal ownership landlords, whether they are portfolio or non-portfolio (excluding first-time buyers, first-time landlords and repayment applications).
By taking a comprehensive view of customers’ circumstances, our top slicing proposition can provide landlords with greater flexibility around how they manage their portfolio. It can also provide improved access to two-year fixed rate mortgages when compared to underwriting which relies on the rental income of the property alone.
We’ve also made applying for top slicing easier by enhancing our DIP process. Brokers will no longer have to select top slicing as an option at the start of the process. Instead, the DIP will now automatically return the loan amounts available, both when using top slicing or just using rental income, for the products available to their customer. What’s more, if their customer is only using surplus rental income from their portfolio to demonstrate the required rental cover ratio, we won’t need to see any additional proof of income.
In addition, if brokers find after submitting an application using rental income only that their customers’ circumstances change, they will be able to switch on to top slicing post-submission without the need to rekey the application as long as top slicing was available initially.