By Paragon, one of the UK’s leading providers of buy-to-let mortgages, have collaborated with eTech, a property analytics, data and solutions provider, to speed up and simplify the online mortgage application process for portfolio landlords.
Through the integration of eTech’s online workflow management system, Paragon will be able to quickly meet PRA underwriting standards when providing buy-to-let mortgages to landlords with large property investment portfolios.
Paragon’s mortgages are provided through intermediaries and the new technology provided by their new partner eTech will enable their intermediaries using the eTech system to easily and quickly import new landlord data, which can then be automatically verified and converted into a specific template prior to submission.
During the recently enhanced online mortgage application process, new portfolio landlords will also be able to have their property details, such as the achievable rent and preliminary valuation information, verified independently using eTech’s online sources, when they use Paragon for their mortgage application.
Portfolio landlords will also be able to display the current EPC ratings for each of their properties within their investment portfolio, which will be automatically updated via the EPC register when they use Paragon’s new online mortgage system to apply for a buy-to-let mortgage.
It is believed that this latest move will further enable Paragon to boost their service capability as well as offer benefits to landlords with both small-scale and large-scale property investment portfolios as they grow their property business.
Following the recent announcement of the collaboration between Paragon and eTech, John Heron, managing director of mortgages at Paragon commented: “Technology is set to revolutionise the mortgage industry and this is a perfect example of a web-based application being deployed to streamline a complex process.
“The new PRA standards rightly call for comprehensive underwriting of portfolio landlords but this can make the application process cumbersome and slow. The eTech system provides a single data entry point for intermediaries and lenders, as well as online verification of key information, taking away the need for multiple data input and manual checking.”
Further to this recent announcement, Mark Blackwell, COO at eTech commented: “We are delighted to be working with Paragon who are true specialists in the field of portfolio lending. Our Buy-to-Let Hub will simplify the administration burden for lenders and intermediaries surrounding mortgage applications for portfolio landlords, which has come about as a result of more comprehensive underwriting standards laid down by the PRA.”
eTech, which was recently acquired by CoreLogic International (NYSE: CLGX) in February 2018, is the leading provider in the UK of innovative mobile workflow management and surveying software that aims to mitigate risk and enhance productivity for participants in the UK’s property market. Currently, eTech handles over 50 per cent of the UK’s property valuation using the platform, and the tech firm provides end-to-end property valuation, a mobile valuation solution and a workflow management platform.
eTech’s clients include UK mortgage lenders, valuation management businesses and valuers, as well as serving the energy market through desktop and mobile solutions to automate the analysis, provision and collection of reports and data.
This latest announcement from Paragon, one of the UK’s leading buy-to-let mortgage providers, comes after recent government changes to buy-to-let lending, which hit portfolio landlords hard when they were introduced in 2017 by the Prudential Regulation Authority (PRA), which is part of the Bank of England.
Since then, mortgage lenders have imposed tighter restrictions on new buy-to-let mortgage applications, which includes tougher rental cover stress tests and additional tests for portfolio landlords. The annual rent of a buy-to-let investment property must cover a minimum of 145 per cent of the mortgage payment when the interest rate is at least 5.5 per cent.
Therefore, for every £100 of rental income provided each month, it must support around £15,000 of the borrowing amount. If the monthly rent amount is lower, then this will affect the amount that a portfolio buy-to-let landlord can borrow for a mortgage.
Under last year’s PRA mortgage regulation changes, the definition of buy-to-let landlords changed to include someone with four or more mortgaged properties and those with a limited company. Therefore, a landlord who owns two properties mortgaged in their own name, as well as two properties mortgaged under a company, is now classified as a portfolio landlord.
Since the introduction of the new PRA regulations for portfolio landlord mortgage applications, more information must be supplied before a new buy-to-let mortgage can be approved. This includes three months’ bank statement, SA302s and tax overviews from HMRC, a business plan and tenancy agreements for all the properties. This has had the effect of considerably slowing down the application process.
The recently announced workflow management platform made developed by Paragon and eTech, aims to increase the speed that a new buy-to-let mortgage application can be processed for a portfolio landlord.
Comments