Buy to Let Mortgage
LOOKING FOR A BUY TO LET INVESTMENT?
WE’LL MAKE YOUR BUY TO LET MORTGAGE PLAIN SAILING
Ready to invest?
A Buy To let Mortgage is often used by people who already have their foot in the housing ladder and already own a home. However there are some lenders that will lend to you if you do not already a home.
We offer advice to individuals, portfolio landlords ltd companies and offer regulated and non regulated BTL advice.
Here at the Mortgage Advice Center, we’ll help you get your foot firmly on the Buy to Let ladder, so that you can start investing in your future.
We are highly experienced in working with landlords, portfolio landlords, developers and first time landlords.
What to consider with a Buy to Let Mortgage
Because we are whole of market advisers, we look at all lenders to ensure you get the one that’s suitable for you. Firstly you will require a deposit, usually a 25% deposit however some lenders do provide 20% deposit BTL. The amount that you can borrow is often based on the amount of market rent that the property would generate. Unlike a residential mortgage the amount you can borrow isn’t linked to your personal income. However some lenders would take this into account if the amount of rent required fell short to obtain the loan.
If you’re interested in a buy to let as a Holiday Home or HMO, click the button below.
Can I get an interest only Buy to Let Mortgage?
Yes you can. The interest only option on a BTL mortgage is a lot easier to obtain that on a residential mortgage and many BTL are taken out as Interest only. However you would not be paying off any of the mortgage on Interest only and would still owe the initial balance of the mortgage at the end of the term if you made no capital repayments. With house prices increasing year on year, this is why the majority of BTL landlords choose to take out interest only mortgages as the monthly repayment is lower than if they were to choose a repayment mortgage. This way, the mortgage is covered by the rent of the property and the debt is therefore only on the property which will need repaying at the end of the mortgage term.
The Bank of England has recently started to impose tougher lending restrictions with strict affordability tests. Part of this includes using Interest Cover Ratios (ICRs) – the ratio to which a property’s rental income must cover the mortgage payments made by the landlord. Lenders can use this ratio to work out how much money the landlord is likely to make. Lenders usually use an ICR which differs from basic rate taxpayers to higher rate tax payers.
The ICR usually ranges from between 125% to 145%. This differs from lender to lender. When the valuation is instructed a valuer will determine the amount the property could be let at and disclose this to the lender. It is important to get a realistic market value of the rent so our advisers can recommend accordingly. There is no point in over estimating what you think the rent would be because it would be confirmed by the surveyor.
Investing in buy-to-let properties through limited companies has become an increasingly popular strategy for individuals seeking to maximise the benefits and returns of their property investments. By utilising a limited company structure, investors can unlock various advantages, such as potential tax efficiencies, enhanced asset protection, and increased borrowing potential. This approach involves purchasing properties under the name of a limited company rather than in an individual’s personal capacity. While it introduces additional considerations and complexities, understanding the nuances of buy-to-let for limited companies can be key to optimizing investment opportunities in the real estate market. If you’re thinking of investing in a Buy to Let and you’re a Limited Company, give us a call today and we’ll help your very step of the way.
Existing landlord? Let us take the pain away from constantly reviewing your portfolio mortgage rates. We diarise and look after our client’s mortgage portfolios to ensure that you are getting the best rates. Once we have all the necessary info we can take the stress out of the process for you when it comes to refinancing.
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