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Buy To Let Mortgages
Buy to Let Mortgages:
How does it work?
A Buy to Let mortgage helps landlords and property investors buy property for the rental market. These are specialist mortgage products that are available from a number of different lenders. Some hight street lenders offer Buy to Let Mortgages, and there are many different niche lenders who specialise in this market too.
Deposit:
The typical minimum deposit for a buy to let mortgage is 25%, but on occasion we may be able to help where a reduced deposit of 20% is available. Some of the best products are reserve for clients who have at least a 40% deposit or equity in the property available.
Interest Only Mortgage:
Many landlords choose to take their Buy to Let mortgage on an interest only basis. This means that the monthly payments to the lender are only covering the interest on the loan and not reducing the capital balance. This can help reduce your outgoings, but we can also arrange a Buy to Let mortgage on a capital repayment basis if you prefer to pay the balance down over a period of time.
Rental Coverage & Affordability:
When assessing a Buy to Let mortgage, lenders will look at the risk factors involved, including the likely rental figure the property will achieve each month. To calculate if it meets lender criteria, a stress test ratio is applied where the rental income needs to be great than the mortgage payment when calculated on an interest only basis at the lenders standard variable rate. Differing lenders mortgage products and mortgage terms will dictate the stress test ratio applied. Get in touch to see how we can help you with these mortgages.
In addition, most lenders require you to be a homeowner, and have a minimum income requirement from salary or self-employment to meet affordability criteria for this mortgage type.
Eligibility:
A Buy to Let property needs to meet certain criteria to be acceptable to the lender. Factors such as construction type, geographic location, proximity to commercial property, and the condition of the property all play a part in determining the likeliness of a lender agreeing an application. Most lenders insist that the property is habitable and lettable at the point of purchase, and the energy performance of the property can also play a factor in the best lender and mortgage rates.
Tips for success:
1. Use a specialist broker – At Advantage Home Finance Ltd we arrange Buy to Let mortgages for new landlords and experienced property portfolio managers. With access to the UK mortgage market, we will advise on the right solution for your needs.
2. Stamp Duty (LBTT) – Almost all property purchases being bought for a BTL purchase will attract Additional Dwelling Supplement. Knowledge of the Taxes you will need to pay can help you decide on the right solution – so speak with an accountant or property solicitor as part of the process.
3. Limited Company vs Personal Name – Solutions exist for both LTD company BTL mortgages, and those in a personal name.
Get in touch:
At Advantage Home Finance Ltd, we provide bespoke tailored advice on the right solution for your needs. There are no fees or costs for our time or advice, and you can contact us for free impartial advice:
Email: hello@advantagehf.co.uk or call us on
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