Buy to Let Mortgages
If you are looking to purchase your first Buy To Let property or you are an experienced landlord, our team of Buy to Let mortgage advisers would be happy to help you source the right mortgage deal.
With hundreds of mortgage products available on the market speaking to an adviser can make the process of sourcing a buy to let mortgage simple and if you have bad credit registered we have lenders that can help.
Buy to Let Mortgages
Buy to let mortgages are specifically for when you want to buy a property to rent out to a 3rd party. Highly popular recently, professional landlords used buy to lets to enable them to build a property portfolio of rented properties that gave them an income stream whilst enjoying the appreciating price of the property itself. With low interest rates offering next to no return on capital, combined with many people unable to get on the housing ladder for a variety of reasons, renting has become more popular than ever and buy to let mortgages have seen a huge increase over recent years.
If you are considering becoming a landlord you will need a buy to let mortgage and there are certain things that you should consider before jumping in. Often for example you ill need to pay a larger deposit as security, often around the 25% level, although some buy to let mortgage lenders need a 40% deposit to secure the very best interest rates. Interest rates tend to be a little higher, but a buy to let mortgage is very similar to a standard mortgage in that each application is individually assessed, so better deals can be available depending on personal circumstances.
The next thing to consider when looking at buy to let mortgages is the rental income versus the mortgage repayments. Most lenders will want to see a 125% annual rental income over mortgage repayment. So if your annual buy to let mortgage repayment is £10,000 your lender will want to see an annual rental income yield over £12,500. There are also, on occasions a requirement for a "buffer" payment to cover short periods between tenants and subsequent loss of rental income.
There are a choice of Buy to Let Mortgages available and most are interest only. This means that you pay the interest on the loan but are not paying back the loan capital. The monthly loan repayment is less than a standard repayment mortgage and an element of the mortgage interest can be offset against personal income tax. However provision has to be made to repay the loan amount n full at the end of the buy to let mortgage period.
Needless to say, if considering a buy to let mortgage ensure that you have sufficient funds to cover any periods when a tenant may not be in the property paying rent, and consider also maintenance and repair bills that will inevitably occur.
Here is some additional information on related topics from our blog:
What to Expect from The Money Hub
We Gather Information Required to Search the Market
We gather some basic information about you using our quick online form
Conduct a Whole of the Market Comparision
We will search 100’s of providers to find you the lenders who are willing to approve your mortgage
Provide full service through to completion
We will show you rates along with the monthly repayments. This will not affect your credit score. We’ll also explain any fees if you progress at this point and as long as you are happy to proceed, provide you with the full service through to completion of your mortgage being accepted
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Buy to Let Mortgage FAQ's