Stress Tests, ICR and Affordability

How lenders really decide, and how to present yourself well

Property lending is not arbitrary. It runs on a small number of tests applied fairly consistently across the market, and this book shows you those rules so you can predict whether the money will be there and present a borderline case well. It explains the few numbers a lender actually weighs, and where to check the figures a lender will verify for itself. You will learn why most avoidable declines come from the gap between the income you believe you have and the income a lender will recognise. The cost chapter covers the fees and charges beyond the headline rate that change the true price of money. The central chapter explains the stress test and interest coverage behind most declines. A complete worked example follows one investor through a decline and out the other side, and the final chapter gives you a sequence to run before approaching any lender, along with the legal questions it cannot answer. Next in this series: “Bridging, Development and Commercial Lending”.

What’s inside

• The only numbers that actually matter
• Where to find reliable local data for free
• Working out true income, not optimistic income
• The full cost stack nobody mentions
• Stress-testing for the bad month, the void, the rate rise
• A complete worked example, start to finish
• Your deal calculator, and the legal questions it cannot answer

Educational material only, not financial, legal or tax advice. Results are not typical and are not a guarantee of income. Freedom Property Academy LTD, registered in England and Wales.