Buy to Let Mortgage
Buy to let mortgages are used to buy property which is used as an investment in the private rental sector. The rates that you will be offered are similar to
those if you were buying for your own occupation and the amount that you can borrow will be dependent on projected rental income and/or your your earnings.
Buy to let mortgages are available with variable, fixed, capped or tracker
rates, please speak to the adviser for more information.
As well as those in regular employment with a good credit history, lenders will also accept those with non standard employment eg contractors or
those with multiple jobs or those whose income consists largely of bonuses or commission etc.
Specialist lenders are also able to help those with a bad credit history for example, county court judgements (ccj),
mortgage arrears, ex-bankrupts and those with IVA.
click here to read about the house buying process.
click here to read about mortgages and the different mortgage types available.
click here to read about self certification mortgages if you have a bad credit history or non standard employment.
Buy To Let Mortgages Explained
A buy to let mortgage is an initiative devised by the Association of Residential Letting Agents (ARLA) and supported by the leading mortgage lenders. It is designed to stimulate the growth
of the Private Rented Sector by encouraging private investors to take the opportunities given by low, highly competitive, interest rates and the reasonable certainty of sustained capital growth over the coming years.
So, itís a mortgage that allows you to buy a property in order to let it out to a tenant. While it is possible to secure a residential mortgage for up to 100% of the purchase price of your home, buy to let mortgages
are rarely available for greater than 85% of the purchase price.
With Buy to let you do not pay commercial rates of interest, however, a Buy to Let mortgage has a slightly higher rate of interest than a normal residential mortgage because it is perceived as carrying a slightly higher risk
(that you canít rent it out for a period and so canít make the repayments etc). A buy to let mortgage is appropriate if you intend to let the property for a number of years. However, they may also be
appropriate to some landlord or developers who wish to refurbish property and then either sell or let it out. The key is to ensure that the loan can be repaid without penalty if you change your mind
and sell the property instead of letting it. Typically, your rental income should cover all the mortgage and then 30% on top. This means that say your mortgage is £100 per month, then you should aim
to let the property out for £130 per month. The extras £30 (in this example) would be used to put towards the periods when the property was not let out to tenants.
Many high street lenders offer buy to let mortgage schemes, some are suitable for the first time buyer, others may only be suitable for the experience landlord. Some of the most competitive buy to let mortgage deals are only
available through introducers/brokers. The reason for this is that buy to let lenders know that these introducers will present their cases to them in the manner in which they like. They allow the
introducer to do what they perceive as difficult, i.e. selling the product or explaining how the buy to let mortgage process works. In this case the lender will take some administration and lend
and not do much else.