FHL offers Limited Company product at core range...
16 December 2015
FHL offers Limited Company product at core range rate in product matrix simplification
Foundation Home Loans (FHL) has announced a significant overhaul of its products and criteria as part of a simplification of its BTL product range that will benefit BTL landlords across all sectors of the market. Topping the changes is the new Limited Company proposition, which will be offered alongside the core range at no additional interest rate premium.
It is felt that landlords, including first time landlords, should not be expected to pay a higher interest rate than for a standard BTL purchase or remortgage, whether they are purchasing in their own name or through a Limited Company.
The wider simplification process comes after consultation with key partners and the broker community. Additional changes to the range include a move to fixed arrangement fee of £1,999 for all loans under £250,000 plus a reduction to the minimum property valuation across all products to £75000.
Main features include: -
- Limited Company interest rate now the same as core range
- Minimum valuation reduced to £75,000; reducing a hurdle that sometimes impacted landlords outside of the South East
- Fixed end dates for fixed rate mortgages. Fixing up to four months over the advertised fixed period giving clients increased certainty they will get the full fixed term period
- Fixed fee of £1999 for loans under £250,000. 2% over £250,000
According to Commercial Director, Simon Bayley, Foundation Home Loans wanted to provide a clear, easy to understand product matrix that provided increased product benefits across the range at a competitive price point.
He said, “There is going to be plenty of interest in 2016 from landlords considering the best way to reduce their tax exposure using a limited company approach. After our initial pilot, we didn’t feel that pricing such a product at a premium was fair. Adding First Time Landlords to our limited company range shows we believe landlords should be able to chose the best set-up that suits their circumstances and not be restricted to by the lenders. Apart from an additional fee due to the extra complexity of underwriting limited company SPV’s, we want brokers and their landlord clients to feel that there is a lender offering choice without charging a premium.”
“We have reduced our minimum property valuation, allowing our introducers to target landlords looking at property away from the South East, where the income to investment ratio becomes more viable. Also, fixed rate terms in BTL have tended to be less than they claim to be. By moving to fixed end dates on fixed rate products, clients who DIP after 16th December for example, will have their fix until 30th April. With all these enhancements, we have also helped to simplify the product matrix, making it easier to navigate and choose the right solutions for your clients.”
“These changes put down a marker for 2016 and show just how receptive FHL will continue to be to the needs of landlords and their advisers.”
