The basis of any successful real estate purchase is a sound financial platform. Being able to make decisions with confidence is key to completing a home purchase, and while there are many competitors that seek to offer a generic “off the shelf” mortgage product to the market, there are inevitably buyers who require a more specialised solution. This is where Foundation Home Loans comes in; this lender specialises in providing the financial solutions that buyers need when the mainstream lenders can’t help. They provide loans for buy-to-let landlords, first-time buyers and buyers who are simply seeking the best rates. They’re also able to take a view on customers whose financial record isn’t as spotless as many major banks would like it to be, and offer a specialist service that caters to these customers.
Because Foundation Home Loans is an independent lender it is able to make its own decisions quickly and firmly. There’s no lengthy back and forth through interminable layers of middlemen; a Foundation Home Loans mortgage application is conducted between the borrower and a decision maker at the lender, so that important information can be conveyed as quickly and clearly as possible. This makes Foundation Home Loans a highly attractive choice for many borrowers, and their ability to meet a wide variety of different needs makes them an ideal fit for the highly competitive mortgage market.
Foundation Home Loans is a specialist independent lender that operates in the secured home loans market, and has been providing top-quality financial solutions for 30 years. They focus on providing finance where the big lenders can’t, and use their expertise and experience developed over many years in the lending market to provide top-notch financial solutions to their customers. Where Foundation Home Loans excels is in creating bespoke lending packages for customers whose needs aren’t catered for by big banks; while these lenders may cover the majority of the market, they focus on the most straightforward mortgage products. For them, this makes sense - most home purchases are straightforward, so it’s reasonable for them to provide products that meet the needs of the majority of borrowers. These large mortgage providers focus on securing as many customers as possible, so they’re most concerned with providing the bread-and-butter everyday mortgage solution.
However, there are many borrowers who don’t fit the profile of the “average” mortgage customer. These could be landlords with a strong portfolio, buyers with an adverse financial history or even first-time buyers without a long credit record. Mainstream bank underwriters are notoriously skittish and risk-averse, and will take even the smallest sign as a reason to reject a borrower. These customers are left out in the cold, then, and aren’t able to take out a mortgage through these mainstream mortgage providers. Foundation Home Loans provides a much-needed method for these borrowers to get the mortgage solutions they need without bending over backwards to satisfy the needs of a mainstream bank.
It would be easy to assume that a smaller lender like Foundation Home Loans is only concerned with a small part of the market, and wouldn’t have the tools to supply a wide range of mortgage products. However, Foundation Home Loans has developed a strong product portfolio in its 30 years of trading and is able to offer mortgage products for clients in many different situations. Here we’ll explore a few of the mortgage products which are on offer from Foundation Home Loans, and highlight the ways in which they meet customer needs.
Foundation Home Loans’ residential mortgage packages are divided into three different sectors, each of which is aimed to provide a tailored solution for a different type of customer. This is an important distinction to make, because it helps guide borrowers to the most suitable product for their needs - it doesn’t simply present borrowers with a long list of options and make them sift through it. The 3 sections into which residential mortgages are split are standard, specialist and first-time buyers, and each one is designed to cater to a specific subsection of the residential mortgage market. Foundation Home Loans explains the differences in more detail on their website, but we’ll cover the main highlights here.
The standard mortgage products from Foundation Home Loans are aimed at borrowers who have a strong financial record, and simply need a little bit of flexibility in their lending plan. These loans are offered at market-leading rates, and can even be obtained with a high loan-to-value ratio which enables buyers to make the most of their deposits. While Foundation Home Loans may call these loans a “Standard” product, they are anything but, and each loan comes with the Foundation Home Loans guarantee of top-quality service and a can-do attitude.
Foundation Home Loans standard mortgages come with a 2-year fixed term interest rate, set according to the size of the buyer’s deposit. This can be extremely useful for buyers who are stretching their finances to make a purchase, because it gives them a reliable monthly payment to budget for. The alternative to this is a Standard Variable Rate, the preferred option of many mortgage providers, which can be varied at will by the lender. Of course this gives the borrower little ability to confidently predict their ongoing payments, so the ability to freeze their interest rates for 2 years is extremely valuable.
Not all houses are the same, and neither are their owners. Foundation Home Loans understands that the mainstream banks’ reliance on credit ratings and scores gives them a blinkered view of risk; in their mind if a customer doesn’t tick all the right boxes they’re a risk too far. However, this is clearly not the case; a person’s financial history isn’t as black-and-white as that, and there are many reasons to take a more holistic approach towards lending. Foundation Home Loans believes that mainstream lenders pass up many opportunities to help prospective borrowers simply because they don’t have the expertise to deal with them. However, Foundation Home Loans can and will take a view on borrowers who have an adverse credit history.
This means that individuals who have declared and discharged bankruptcy, those with CCJs and arrears on unsecured borrowing, as well as IVAs and numerous other financial hiccups may well be able to secure a mortgage from Foundation Home Loans. This doesn’t mean that Foundation Home Loans lends indiscriminately, though, and the underwriting process is just as strict for borrowers in the specialist mortgage range as it is in the standard and first-time buyers range. However, Foundation Home Loans is able to provide a standalone set of products which cater specifically to borrowers with alternative circumstances. This commitment to providing a lending solution for customers of all types is what helps to set Foundation Home Loans apart from the competition in the world of mortgage finance.
First time buyers are one of the most important sectors of the home loan market, and constitute a major portion of all home purchases in the UK. Foundation Home Loans recognises this, and has produced a dedicated range of mortgage products that precisely meet the needs of first-time buyers. The challenges facing those who’ve never owned a house before are immense, and the amount they must learn in a short space of time can be overwhelming. In addition, the implications of an unaffordable mortgage can be severe, and it’s easy for first time homeowners to become over-encumbered with debt if they take out a mortgage that’s inappropriate.
Foundation Home Loans works hard to ensure that every loan it approves is ideally-suited to the circumstances of its customers. While many lenders may want to close the deal no matter the cost, Foundation Home Loans offers its products only to lenders which fit its criteria, and factors in all potential risks when identifying potential customers. This is not to say that Foundation Home Loans can’t be flexible, though, and this lender is able to offer loans for a wide range of different deposit sizes and property types.
Foundation Home Loans also offers a range of financial products designed to meet the needs of professional landlords and property investors. These loans are “unregulated”, meaning that the Financial Conduct Authority does not require Foundation Home Loans to hold a license in order to offer these products (Foundation Home Loans does hold a license, which it needs to offer its residential owner-occupied mortgages). These buy to let loans aren’t subject to the same strict controls as residential loans because landlords are assumed to have a professional understanding of the risks involved in taking on a mortgage; an investor with a strong portfolio will often seek to leverage their existing assets as much as possible in order to expand, and unregulated buy-to-let mortgages enable them to do so.
Again, buy to let mortgages are divided into several subsections which help to guide potential borrowers to the right loan type for them. Foundation Home Loans offer specialist and standard loans in their buy to let range, but there are a further 2 loan products on offer within this lineup; first-time landlord and HMO loans.
A lucrative sector of the buy to let market is “Homes in Multiple Occupation”, often abbreviated to “HMO”. These properties are a step up from more common buy to let properties and are usually only taken on by experienced landlords with the knowledge to handle their greater complexity. HMOs are often more profitable than separate standalone buy-to-let properties because they enable landlords to take on more tenants in the same building, but they are harder to manage and operate successfully.
An HMO consists of a large property where three or more separate groups of tenants share the residence’s facilities as well as the same living area. This separates them from blocks of flats, where each separate group of tenants has their own set of facilities, and large rental properties where a single group of tenants shares all the property’s equipment. There is no real upper limit to the size an HMO can be, although it must be registered with the local authority if it reaches a certain size (usually 3 stories, though there are many other regulations to take into account).
HMO loans from Foundation Home Loans are an excellent way for experienced landlords to take on the greater opportunities for profit that come with owning an HMO. Foundation Home Loans recently began offering this product after seeing how the buy to let market is beginning to shift towards a more professional model which incentivises HMO ownership. Growing regulation of the private rental market is seeing “casual landlords” pushed out of the market, so demand for strong, affordable HMO finance loans is on the increase.
One of the most important things for a landlord to have is experience; knowing how to manage a property and meet the needs of your tenants whilst also running a profitable business doesn’t come easily, and there’s no substitute for hands-on experience. Consequently, many lenders are wary of approving mortgages for would-be landlords who haven’t actually run a rental property before. However, experience isn’t the only thing that makes a good landlord, and the skills of organisation, foresight and careful budgeting are equally valuable. A buyer with all of these skills stands to be a successful landlord, and Foundation Home Loans understands that even if you’ve never owned a rental property before you may still be an excellent landlord.
Foundation Home Loans’ specialised range of mortgages that cater to the first-time landlord market are expertly adjusted to meet their precise needs. The requirements for these types of loans are identical to those required of borrowers for “standard” mortgages from Foundation Home Loans, in that they require a strong credit history and a significant deposit. However, Foundation Home Loans offers some excellent options to first-time landlords, including a 5-year fixed interest rate that helps them to control costs.
For many professionals in the UK property sector it’s important to secure a single source of financing for their entire portfolio. By consolidating their borrowing to a single lender it’s possible for these landlords to streamline their finances, keeping a tighter rein on their spending and minimising costs. Foundation Home Loans offers a quick and easy way for these landlords to submit their entire portfolio for appraisal, and their straightforward process for determining overall profitability keeps up momentum.
A landlord’s intermediary can simply upload their property spreadsheet of 4 or more properties directly to the Foundation Home Loans website, and the lender’s dedicated team of analysts will then determine the portfolio’s value. For larger portfolios of 10 or more properties it’s possible to seek guidance directly from the Foundation Home Loans helpdesk.
Recent changes to UK regulations have begun to squeeze the buy-to-let property market. In essence, the Government is attempting to stop landlords buying up property by introducing much higher Stamp Duty and reducing tax relief throughout the sector in an effort to free up more housing for first-time buyers and local residents.
Since these changes have been announced, private landlords have begun seeking ways to mitigate the impact this will have on their businesses. One powerful method is to form a private limited company, which allows landlords to treat their property’s mortgages as a tax-deductible business expense, much as private landlords have been able to do until the recent changes came into effect. This attractive proposition has led many private landlords to seek limited company status for the additional income it can bring in, although it’s more suitable for landlords with an established property portfolio than for single-property “casual landlords”.
Foundation Home Loans has begun catering to this new influx of landlords by accepting applications from limited company landlords, and even waiving their usual processing fee for applications of this type. This means that Foundation Home Loans are one of the easiest and most affordable mortgage providers for the professional landlord market, offering some of the best-quality and price-competitive products available.
Foundation Home Loans is well-placed to continue offering high quality home loans to the market, both for residential owner-occupied properties and for professional landlords. It’s important to take into account the ever-changing nature of the property market when assessing Foundation Home Loans’ future position, and this lender’s ability to change with the times and develop market-leading solutions places it firmly at the forefront of the financial industry.
Because Foundation Home Loans isn’t afraid to provide loans that don’t fit the mainstream lending profile, and because it’s able to use its extensive experience to provide a tailored, bespoke service to the professional rental community, this lender stands to become a more and more important part of the real estate investment community. Borrowers and investors alike across the industry will find the Foundation Home Loans service to be a vital part of their property investment objectives.
Our mortgage brokers offer mortgage advice on a wide variety of mortgages, more detailed information about the different mortgages can be found below.