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Concern at TMW not checking income for BTL loans

Brokers have raised concerns about The Mortgage Works not verifying the income of buy-to-let mortgage applicants.

TMW does not have a minimum income and does not carry out income checks. Instead, the firm looks at each property’s potential to pull in 125 per cent of the monthly mortgage repayment in rent.

The other main players in the buy-to-let sector, Paragon and BM Solutions, both require a minimum income of £25,000 before they will lend to a borrower. Paragon verifies income in every application and BM says it decides whether to check income on a “case by case basis”.

Nationwide for Intermediaries head of corporate accounts Paul Howard says: “We are comfortable with our approach, it has worked since 2002 and the mortgage book quality speaks for itself.”

Enness Private Clients partner Hugh Wade-Jones says: “You get people who, although they might be on decent money, have six or seven buy to lets. If two or three of those go empty at once, they are in trouble. A £25,000 salary is not going to support £750,000-worth of buy to lets.”

Buy To Let Funding Services principal Geoff Laird says: “For new applications, all lenders should take prudential means to check income.”


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There are 6 comments at the moment, we would love to hear your opinion too.

  1. What a load of rubbish. Well done Nationwide for giving us a different option and a common sense one at that. Might be better to interview advisers who are active in the BTL market.

  2. It seems to me that every time something works there are some who deem it wrong. Lets face it there is no security in anything these days, bank savings, investments, jobs, pensions etc etc!

    If someone has the entrepreneurial attitude to go into buy to let then we should be helping them not putting up more obstacles?

    Go for it TMW I have been an introducer for years and surely it is there decision who to lend to. Who are these brokers who are raising concern? Lets get the ball rolling again! We need first time buyers, home movers, remortgages & buy to let customers to kick start the economy. It is the lenders who hold the key to rejuvenate the building industry which in turn will stimulate future growth. Go For It I Say

  3. BTL are commercial transactions…’Not’ regulated residential mortgages. The interest rate and equity required by the lender should reflect this.

    The request for ‘proof’ of income, 25k or otherwise, represents very little in the credit risk assessment given the nature of such mortgages.

    Accordingly, when structured and processed effectively the approach by TMW is fine, as Paul Howard as pointed out…..

  4. Why are brokers concerned. If they are doing their job properly they will have records of income(e.g. pay slips or accounts) and if they have any concerns they should not process the case anyway.It doesnt, matter if it is a regulated or non regulated mortgage.

  5. Well said everyone. who are these clowns who are “concerned”.I rekon they must be the small time charlies tied to some network that either does not do BTL or are not on TMW panel. As previously stated,TMW are a far bigger organisation than these 2 bob outfits and know exactly what they are doing. Did Nationwide ask for a bail out?

  6. No doubt that if this Hugh Wade-Jones was asked to raise a buy to let mortgage of £750,000 for someone on a low income he would refuse to do it. Its very moral of him and I think is is a good thing.

    Because it means there is more business for the rest of us! Of course I suspect his morals would go out of the window. I agree with you Gerry they are just small time Charlies.

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