Managing Banks

Unless you’re particularly cash-rich or you’re an exceptionally gifted landlord, you’ll need to think about how you approach banks for credit and how you’re able to maximise the chances of you getting what you need. How can you make sure you’re asking the right questions?

Support Your Requests

A business plan is absolutely vital for supporting any credit requests you have and good forecasts will make a real difference to your chances of success, especially if you’re looking for your first buy-to-let mortgage. A working model should include rigorously researched details of prospective income, a good estimate of possible costs and, ultimately, a summary of the long term prospects of your let: let the bank know when and how they can expect their money back.

Details Matter

A more detailed plan looks more realistic and much better thought through, therefore it looks less risky. Include details of smaller costs you might think you’ll incur including repairs, maintenance, landlord insurance, marketing costs, agency fees – it all counts and it will all affect your bottom line which, really, is what your bank is interested in. If you’re asking for an extended overdraft or perhaps a little more on the mortgage for development, be thorough with your costing and make sure you know the real costs of your plans: banks won’t take kindly to lots of ongoing requests for finance that never gets resolved.

Loyalty and Banking

It used to be that loyalty counted for a lot in the financial sector but this applies to a much lesser degree now. Your current bank should always be the first port of call if you’re looking for additional finance or a change to your mortgage plan: they would prefer you to stick with them rather than switch elsewhere so you may get a better than market rate deal. However, that’s not to say you can’t shop around – a good credit record is transferable for a reason.

It’s a big deal getting on with the banks and it’s a complex and sometimes intimidating world for even the most experienced landlord. The best advice is to know your plans inside out – then relaying them in the most convincing way possible to the banks should be no problem at all.