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  • Mortgages & Finance

    Top slicing

    Good morning,

    I've seen mention of Top Slicing being used to top up rental income enabling larger mortgages to be obtained .

    How do the providers keep track of this ie can the extra income only be used once or several times?

    Kr

    Alan

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    Hi Alan

    It is an assessment as to whether you can afford it from your existing other income. After they have assessed they are not checking it. That is why the top up is not a top up from nothing but of the interest cover.

    You should be sure of your future financial position because it may be that you need to top up again when you refinance the mortgage. If you have plans to reduce your other income then you may end up staying with the same lender and on SVR (ouch!).

    Give me a call if you need any help getting the mortgage. stuart@johnsonsca.com or 0203 907 7022

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    Tax advisor and mortgage broker

    stuart@johnsonsca.com

    02039077022


    Many thanks Stuart,

    I will be in touch.

    Kr

    Alan

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    Hi Alan

    Top slicing is one of the considerations that some lenders allow, at the time of application.  They do not do regular reviews, it is a feature of the application product based on the criteria at that time.

    As Property Tribes Financial Services is an approved Broker with the widest access to market, we know the lenders who could help you with this.

    Call the Team at PT FS on 01206 654 444 anytime for expert and professional advice.


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    Hi Alan,

    Top-slicing is typically available only to 'non-portfolio' borrowers, so it is sort of self-regulating in that you can have only a maximum of three investment properties before top-slicing ceases to be an option.

    I'm happy to offer any help or advice.

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    Whilst top slicing seems great in isolation, Alan, you should consider that if and when you become a portfolio landlord lenders will undertake rental cover and loan to value checks on your background portfolio. Therefore, if you have raised significantly more than the rental income would have otherwise allowed, you could find yourself in a situation when trying to secure finance with other lenders at a later point. Some lenders have much more favourable background assessments than others so it won’t be an issue with all lenders, but it may certainly limit the options. 

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    Fyi, Top-Slicing buy-to-let is available to portfolio landlords with Barclays - Barclays have their own unique affordability calculator, they don't show their formulas or show how its calculated.

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