Customers applying for a buy-to-let mortgage will now be asked to disclose their residential mortgage payments and the household income used to support it.
The household income should be keyed as the total gross income for everyone in the household who is party to the residential mortgage, irrespective of whether they are party to the buy-to-let mortgage.
In a guide issued to brokers, the lender has laid out how applicants’ employed and self-employed income should be input.
Self-employed applicants must disclose the last two years’ income of which an average will be calculated. Self-employed income must be keyed as the total net profit from all self-employed activity, including rental income.
The lender said it was important income was keyed in accurately as it would be used in the lending decision. BM Solutions said it wanted to collect more information about customer income as part of the creditworthiness changes introduced with the Mortgage Credit Directive.
Andrew Montlake, director at mortgage brokerage Coreco, said the additions meant buy-to-let applicants were being asked to disclose a lot more information about their personal circumstances than they would have done in the past.
“I think we will see more lenders moving towards this approach,” added Montlake. “Firstly it will ensure consumer buy to lets and business buy to lets are distinguished but I also think this approach is encouraged as good practice in making sure the most salient information is recorded and kept on file.”
