Getting any kind of mortgage can be stressful enough. Working with a specialist mortgage broker can help you get access to unique deals, as well as expert advice.
A buy-to-let mortgage does exactly what it says on the tin; it is a mortgage for people who want to buy a property – such as a flat or a house – and then rent it out to tenants. Buy-to-let mortgages often require a larger deposit than standard residential mortgages, and interests can be higher. As opposed to residential mortgages, which are regulated by the Financial Conduct Authority (FCA), buy-to-let mortgages are not usually regulated if they are bought as an investment.
If you’re looking to enter the rental property market, or make a large investment, then a buy-to-let mortgage is a great option. Whether you’re adding to an already established portfolio or this is your first venture into rental investments, the perfect buy-to-let mortgage can help unlock a whole other avenue of revenue.
As with a residential mortgage, you will need to put a deposit as a down payment on your chosen property. The required minimum deposit will likely be higher – usually between 20% to 25% of the property’s value
Choose your mortgage type. We’ll go into more detail on the different types of mortgage further down the page, but many people choose to take out an interest-only buy-to-let mortgage. This means that you will pay off the interest each month, rather than reduce the capital amount
Once your mortgage term comes to an end, you will need to repay the remaining capital debt – which is the full amount of the mortgage. Some people choose to save into an ISA so they can make the repayment, or they may sell the property to pay it off instead or remortgage to extend the term
Different lenders will have different eligibility criteria for the buy-to-let mortgages that they offer, but most will look at the following:
– Age – Most lenders will only lend to those aged 21 and over, whereas some lenders don’t have a max age limit
– Deposit – As we mentioned above, you will likely need a larger deposit. The average is around 25% but some will ask for as much as 40%
– Borrowing history – Lenders will take a look at your credit score and history to see if you are a responsible borrower; do you make your monthly payments on time? If you’re not sure, take steps to improve your credit score before applying
– Income – Most lenders will want you to earn a minimum of £25,000 in order to be considered for a buy-to-let mortgage, especially if you are a first time investor. This can vary depending on the lender
With a Mortgage Experience adviser on your team, you can sit back, relax, and make yourself a cuppa, safe in the knowledge that we will be doing all the heavy lifting to find you a suitable mortgage with the best rates available. This gives you more time to pack, and well, do the actual physical heavy lifting (should you wish) as you move into and enjoy your new home or the financial benefits of your remortgage.Get In Touch
With this type of mortgage you will pay a fixed amount over a specific period of time (years). Usually, the longer the fixed period, the higher the interest rate attached to the deal. A fixed rate gives you security and peace of mind that your payments won’t change over the period of the fixed term.
This type of mortgage takes the lender’s standard variable rate and applies a specific discount. If that rate fluctuates, then yours will too, however the discount will stay the same.
Almost the opposite of a discount variable mortgage, the rate of interest for this type of mortgage is set at a percentage above the variable rate, but it is marked against the Bank of England’s base rate. Again, if this rate fluctuates, then so will your rate.
As long as you use the right mortgage broker, it is entirely possible to secure a buy-to-let mortgage through a limited company. Many banks and high street lenders will turn away this kind of application, preferring to stick to the ‘standard’ mortgage, which ultimately means that applicants may resort to taking out loans rather than experience the benefits a mortgage can bring.
Whether you have a small or large portfolio, you can experience great tax benefits by buying a property as a limited company, especially if you pay a higher rate of tax. They’re also suitable for those who want to purchase a property as a collective rather than two individuals.
*Note: Do not enter any symbols, commas or letters. Enter simple numbers only. These figures are only illustrative. All mortgages are subject to the applicant(s) meeting the eligibility of the specific lender. An assessment of your needs will be confirmed before a recommendation can be made.