Buy to let mortgages
The best buy-to-let mortgages have become much tougher to get following the credit crunch. However there are still deals out there if you look in the right place. Our mortgage advisers will ensure that you find the best buy to let mortgage for your circumstances.
The main difference between a standard mortgage and a buy-to-let mortgage is that the lender takes account of the rent you will earn from the property as the primary source of income. Some may also take landlord's personal income into account.
Typically lenders will want prospective rental income to meet at least 125% of the monthly interest payment on the loan. This will either be based on the pay rate for fixed and tracker deals (i.e. the initial rate before the deal ends) or the lenders standard variable rate (potentially plus an extra 1% or more).
This is to cover landlords against periods when their property may not manage to be rented out and reassure the lender that the borrower will not default.
Lenders will generally lend only to those with larger deposits, with most deals asking for at least 30% put down by borrowers. It may be possible to raise some of the deposit against other property that you own, the mortgage adviser assigned to you will assess your circumstances and let you know the best option for you.
Any mortgage you have on your own home can potentially cut the amount you can borrow under the buy-to-let scheme if you are relying on personal income to shore up the deal.
How much you can borrow depends on the lender, but the maximum ranges from £150,000 to £1m per property, and there may also be rules on how many buy-to-let properties you can have.
To be offered a buy to let mortgage, borrowers must meet rent to mortgage interest rules, as stated above, and come up with the relevant deposit. Deals become more competitive if you can put down 40% or more and criteria such as rental income to interest may be relaxed.
Buy-to-let mortgages are not regulated by the Financial Service Authority in the same way traditional home loans are now controlled (although the FSA has just announced that this is about to change). This means buy-to-let lenders do not have follow such strict rules on how they sell, promote and advertise their deals.
Your initial consultation is obligation free. We charge a fee for mortgage advice and will retain the commission from the mortgage lender. The precise amount will depend upon your circumstances but we estimate it will be 1% of the loan amount. Alternatively you can choose the fee only option with the commission from the lender being forwarded to you, the typical fee is 1.5% of the amount borrowed.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.