The property market has been an exceedingly difficult one to judge this year, with surveyors being very cautious at the...
Buy to Let Mortgage on the High Street
Buy to Let Mortgages
A Mortgage 4 You can help with all types of buy to let mortgages.
Can we help with buy to let mortgages?
YES We Can
With the recent changes to the way in which Buy to Let (BTL) properties are now viewed by Her Majesty’s Revenue & Customs (HMRC), Buy to Let Mortgages have now become a very specialist market with clients needing to carry out some research before they enter this market. Even experienced portfolio landlords now have to make far more checks to see what the impact will be on their existing portfolio and the best way forward when looking to expand their property portfolio.
The major issue that all clients must initially consider is, do they purchase in their sole name or via a Limited Company called a Special Purchase Vehicle (SPV)? There may now be tax advantages to purchasing via a Limited Company and all clients should consult their accountant or a Tax Advisor to see what route that they should take before they consider making a purchase
Many of the high street banks and building societies now offer a buy to let mortgage product, together with a number of specialist lenders who tend to concentrate on the investment property sector. However some are more competitive then others, and why not let us do the research for you. Independent mortgage brokers will also be able to recommend mortgage arrangements which are not available on the high street and which should meet your buy to let mortgage requirements on the most competitive terms. Here at a mortgage 4 you we have access to the full buy to let mortgage market and with our sourcing systems and over 40 years of experience in financial services, we will find you the most suitable product on the most competitive terms.
The success of a buy to let mortgage is down to the increasing appreciation and popularity of buy to let as part of your investment portfolio. Property is a great way to invest money for the long term, with the stock market being far more volatile. The UK population is growing by the day, and with this comes the greater demand for rental property, which leaves the landlords in a positive situation.
Here at a mortgage 4 you we have helped many clients arrange a buy to let mortgage with competitive interest rates as well as other added bonuses. If you are interested in buy to let mortgages, or would like to apply for one then fill out our enquiry form or call us on 0800 802 1003.
Buy to Let Mortgages Questions and Answers
Many of the high street banks and building societies now offer a buy to let mortgage product, together with a number of specialist lenders who tend to concentrate on the investment property sector. However some are more competitive then others, and why not let us do the research for you. Independent mortgage brokers will also be able to recommend mortgage arrangements which are not available on the high street and which should meet your buy to let mortgage requirements on the most competitive terms. Here at a mortgage 4 you we have access to the full buy to let mortgage market and with our sourcing systems and over 40 years of experience in financial services, we will find you the most suitable product on the most competitive terms.
Did you know that buy to let mortgages become so popular in 2006 that 10% out of all mortgages taken were buy to let mortgages, that percentage is even higher today. The success of a buy to let mortgage is down to the increasing appreciation and popularity of buy to let as part of your investment portfolio. Property is a great way to invest money for the long term, with the stock market being far more volatile. The UK population is growing by the day, and with this comes the greater demand for rental property, which leaves the landlords in a positive situation.
Here at a mortgage 4 you we have helped many clients arrange a buy to let mortgage with competitive interest rates as well as other added bonuses. If you are interested in buy to let mortgages, or would like to apply for one then fill out our enquiry form or call us on 0800 802 1003.
- High rise flats ( over 4 storeys )
- Ex-local authority property each on its own merits )
- Flats above shops ( down to the surveyor )
- Non- standard construction
- Properties let to DSS tenants
- Properties let to more than one family
- Flats where there is less than 50 years left on the lease at the end of the mortgage term
- Flats where the landlord has disappeared and there is no formal management committee.
The key to buying a property as an investment is research, making sure that you purchase in an area where there is real demand for the type of property for rental, and what is a realistic rent. All lenders now build into the rent calculation a stress test that is based on what might happen to interest rates in the future, and what impact this may have on your ability to service the debt. Buying in the right area at the right price, with real demand for that type of property is essential to your success in the property market. Never buy on a whim, or after one visit, unless you have done your homework very well.
The Financial Conduct Authority does not regulate some forms of buy to lets, commercial loans or will writing, secured loans or bridging finance.
When clients are looking to invest for the future, property has always featured very strongly in any portfolio, and there is no reason to suggest that this will change in the foreseeable future.
Bricks and Mortar gives that positive sign of future growth without the ups and downs of the stock market where you may have to accept a higher risk profile to your investment. However as your Grandmother would have always said Do Not Put All of Your Eggs In One Basket. So spreading your investments across a wide range of products will be the key to long term growth with a positive result.
Getting your foot onto the investment property ladder via a Buy To Let property is an excellent way of testing the market and feeling comfortable with the risk and the treatment by HMRC. Before you even consider purchasing a BTL property talk to an Accountant or Tax adviser to see what is the best route for you to take either via a limited company or in your sole or joint names. The way in which BTL properties and the income are treated by HMRC has changed and may change gain in the future to reflect the housing shortage, so please make sure that you do your homework before you dip your toe into the BTL market.
Criteria for Applicants
AGE
Age is not the issue that it used to be, but most lenders would prefer the applicant to be age 25, and at the other end many others do not have any age restriction. This area is changing as we are all living that much longer and many of us are working way beyond the normal retirement age of 65.
YOUR INCOME
Personal income is still an important part of the application particularly if you are a first-time landlord. Most lenders would require you to have a minimum income of £25,000. Although the debt is serviced by the rental income, lenders are more comfortable when they can see that you could still make the mortgage repayments in the advent of the rent not being paid by the tenant.
CREDIBILITY
Your credit profile will have an impact on what terms we can offer you, making it very important that we see a copy of your credit file at enquiry stage, so we can see how we can help you and what terms we can offer you. You may have to find a larger deposit or accept the interest rate maybe a little higher if we can place your application for you, but there are a lot more lenders who will now accept an element of adverse credit, so you may get a pleasant surprise.
DEPOSIT
As a first-time landlord you would have to find a minimum deposit of between 20 and 25%. With all BTL mortgages they are stress tested on the rental income. This will vary a great deal between lenders, more so if there are any credit issues. It is therefore very important that all clients make sure that they make sure what is a realistic rental income for the property, either from the estate agent or letting agent, so we can be certain this passes the rental stress test for the lender of choice.
BUYERS
Buyers should be aware that some lenders have a minimum purchase price, and this sometimes relates to the geographical position of the property. If you have a clean credit profile this maybe around £50,000 however if you have a credit impaired profile it can be up to £90,000. Your credit profile will determine which lenders you will have access to, which will then allow us to advise you of the property price range that you can consider.
LOCATION
You should be aware that most lenders will lend in England and Wales, but we have a restricted panel who will lend in Scotland and these maybe postcode sensitive. There are a small number of lenders who will consider Northern Ireland.
TENANTS
When looking at the demand for rented property in any area, you should be aware that all lenders require a tenant on an AST basis, normally six or 12 months, with the rent being paid by the tenant. Where you should be cautious is where the rent is to be paid in part or whole by the DSS. Not all lenders are happy with tenants supported by the DSS, which may impact on your decision to purchase in a certain area of the Country. With regards to Higher Multiple Occupancy (HMO) we have to do a little more research to find the right lender as this is a particularly specialist field.
We are mortgages specialists with over 40 years combined experience in financial services, and we spend a considerable amount of time making sure that we are knowledgeable in a rapidly changing market. We endeavour to place your enquiry at the most competitive terms based on your own personal circumstances.
A fantastic service run by fantastic people. Always kept us updated a long the way from getting our mortgage offer all the way to completion, topped off by a lovely gift! Thank you Michael and Karen for everything you have done for us.
Dan and Chantelle
– Dan Webb – Reviews.co.uk
Relevant Products
Property Criteria
Can We Help?
What landlords should always be aware of, is that the type of property and the location will always have an impact on how acceptable it maybe to lenders and how the underwriters are likely to view it. This highlights the importance of doing your own research into the property, not just for the lender, but what is the attraction now and in the foreseeable future for tenants.
It could be;
Competitive rent for the area
Access to certain schools
Near to current place of work
Access to road or rail links for business or pleasure
Strong demand for student let (HMO’s)
Seasonal demand at certain times of the year or AIRBNB
What Types of Property Can you Help Me Obtain a Mortgage
What landlords should always do, is to carry out their own research on the area and what is the demand to live there and what is the driving force behind that reason. It could be access to certain schools, near to their work place, or being near to road or rail that will allow them to travel to main area’s of work.
We are seeing a number of landlords concentrating on Student let or HMO’s with more than one family in residence, the attraction being the strong income stream
With all properties the rental stress test must be meet and you need to be confident that your proposed rent is realistic for the area and the type of property.
There are certain properties that lenders will look at in more depth;
1 High rise flats
2 Ex local properties
3 Non- standard construction
4 Properties above or next door to commercial property
It is not a NO with these properties, but most lenders will be more cautious.
A MORTGAGE 4 YOU
Will Lenders Accept Bad Credit?
The positive response to this question is YES we do have lenders who will accept a degree of Bad Credit, the more historical the Bad Credit the more choice of lenders we will have. There will be an impact on the terms and in some cases the loan to value could be lower, but we have a lot of competition amongst lenders in this market which keeps the terms competitive. It is always helpful if we can see a copy of your credit file up front, which will allow us to give you an accurate response very quickly, we just hate to say no.
Buy to Let Mortgage Term
The term of the buy to let mortgage can be somewhere from 5 years depending on the age of the applicant and in some cases the outstanding term on leasehold property or to fit in with the clients wishes.
When considering a buy to let purchase it is important to know the demand in the area in which you intend to purchase for the type of property that you are looking at. It may be worth while getting help from a letting agent who knows the area, and is a member of ARLA (Association of Residential Lettings Agents).
There are also a number of good websites where you can get a good idea of property prices and current rental demand, ( Zoopla, Up my Street, Ladders and many more )
The letting agent may also be able to fill you in on what the likely pitfalls will be in any particular area if not you should always do your own research on the area and the market first, before you commit to purchase any property, or let A Mortgage 4 You help you today. Researching the area is an essential part of any property purchase. Always research first, find out as much as possible about the area as you possibly can, from tenant demand to any trends that may help you evaluate the areas suitability, such as employment, student demand, and access to the bus, train and road links. If you have any concerns about the crime in the area the Police have a local community officer who can advise you on areas to avoid.
By planning with consideration, and purchasing carefully, you ought to have acquired a property which does not require too much maintenance and appeals to the tenant market. You should also have taken into account initial rent void periods in which the property is uninhabited and not producing income.. When participating in a buy to let mortgage, insurance is always worthwhile to cover you in the times in which your tenant fails to keep the rent payments or causes damage to the property..
HERE FOR YOUR BUY TO LET NEEDS
Here Delivering an Exceptional Service for Clients
A Mortgage 4 You has been helping prospective landlords and property owners wishing to diversify their portfolio for more than 40 years. We offer a personalised mortgage service – we understand your needs and requirements and look to source you the best deals with the most competitive terms.