If you are looking to invest your money through property, whether its your first time or you want to expand your existing portfolio – our Librarians are here to help.
Getting the right mortgage product will make a big difference to the return in your investment, so its vital to consider our professional advice in this area.
Specialists in buy to let mortgages.
The FCA does not regulate some forms of buy to let mortgages.
A Buy to Let is where you purchase a property with the specific intention of renting it out to a tenant. You can be a landlord with a portfolio of properties or even just renting a place to a friend. If you don’t have enough cash to buy the property in full, you will need a Buy to Let Mortgage. At The Mortgage Library we specialise in finding the best deal for all our landlords, no matter the size of their portfolio!
Remember, when you are purchasing a Buy to Let property, you are liable for additional Stamp Duty Charges – refer to our Stamp Duty Calculator.
Most mortgage lenders will require you got have some sort of ‘mortgage experience’ in order to consider lending on a Buy to Let mortgage. Most lenders will also require you to be a current ‘Owner Occupier’. However, with our extensive knowledge on the market, we have access to lenders who will consider applications for ‘First Time Buyer First Time Landlords’. Don’t assume that you are not eligible for a Buy to Let Mortgage. Speak to us today and we can tell you your options without any affect on your credit score.
You will get a choice of whether you want to take your Buy to Let mortgage out on an interest only or full capital repayment product. Most buy to let mortgages are on Interest Only, since most landlords are looking to generate income, and this helps keep the repayments as low as possible. However, this means that unless you overpay, the amount that you owe the lender will not decrease. You are just paying the interest to the lender. This usually means that landlords will simply end up selling the property at the end of the term in order to repay the loan.
However, you can still choose a repayment mortgage if you wish.
Whilst there are a few similarities between these two types of mortgages, there are also some key differences. Firstly, the costs, which include upfront fees and interest rates, tend to be higher on a buy to let mortgage. The minimum deposit for a buy to let purchase starts from 20% - 25%, in comparison to just requiring a minimum of 5% deposit if you are purchasing your own residence.
Underwriting is also different for a Buy to Let mortgage. When you are purchasing your own residence, lenders will use your income to establish their maximum lending. However, when purchasing a Buy to Let property, whilst most lenders will have a minimum income requirement, they will stress test the rental income to assess affordability. Some lenders will take into consideration your salary if there is a still a shortfall in the rental income – this is known as top slicing.
By Jay Thain | 03 October 2020
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