Are you considering buying a property that you intend to rent out to residential tenants for a profit? When considering a buy to let mortgage there is a lot to take into account, especially if you plan on renting out the property to a third party. Bespoke Home Finance is here to help you at all stages of the process.
Most Buy-to-Let mortgages are not regulated by the Financial Conduct Authority
– Income and affordability
– Credit score
– Deposit amount
– Age
– Employment status
– Location
Other requirements to note include the fact that most buy to let mortgage lenders require applicants to be permanent UK residents or citizens due to ex-pats being deemed as high risk because they live overseas. Occasionally, some lenders will still lend to overseas applicants in cases where they are low risk.
Affordability for most mortgages is usually assessed by calculating your income against your outgoings. However, buy to let mortgage operate quite differently. With this mortgage, affordability is assessed by calculating whether your rental income will cover the costs of the mortgage.
Nonetheless, there are lenders out there that require applicants to have a minimum income of £25,000 per annum whilst others do not require applicants to have an income.
Lenders typically require your rental income to cover your mortgage by 125-145%. Even so, it’s important to note that all lenders operate differently and have different criteria for assessing how much they can lend.
The minimum age for being able to secure a buy to let mortgage is 18. However, most lenders typically require applicants to be at least 21 or even 25 in some cases.
The maximum age is usually 85, with some lenders only going up to 75. Whereas others do not have an age limit.
Typically, you will need a higher deposit amount for this mortgage in comparison to a residential mortgage. The deposit rate is usually 25%. This is because most buy to let deals start at 75% loan-to-value. Some lenders may accept a 20% deposit, but that is normally applied to experienced landlords.
If you have affordability issues or a low credit score, some lenders may require you to pay a higher deposit to lower their lending risk. Additionally, the same applies to those who are purchasing a property that needs extensive work or is of non-standard construction.
I aim to find you the perfect deal possible and I understand that everyone’s circumstances are different, but this investment can make a huge difference to you and your family. That is why I am here to help you with all the facts and information I have. Not only that, but you will be getting advice from a mortgage expert with years of experience.
When looking at buy to let mortgages, there are generally higher interest rates. It’s also worth taking into consideration the potential rental income as this can affect the amount a lender is prepared to offer.
Despite the restrictions placed, you will, however, be eligible for a range of tax deductibles. For more information, contact me today for expert mortgage advice.
Furthermore, if you are looking to move home or even buy your first, I am here to help. Call me today on 0330 111 2477 or fill in the contact form below. I look forward to hearing from you and remember, there is no obligation or no high-pressure tactics on ours.
