When expanding a property portfolio buy to let mortgages can be a huge help. Property investors, developers and landlords will take this option, as the mortgage accounts for the fact that the ‘owner’ will not be residing in the property, but it will be let to individuals, families and depending on the size of the property, a house of multiple occupants (HMO). Holiday homes to let will also come under this main umbrella. A normal residential mortgage will be for an individual or family that will reside in the property as their permanent main address, so they would not be eligible for this kind of financing.
Who is eligible for a buy to let mortgage?
You do not have to be a part of a large limited business to be able to have a buy to let mortgage, but there are criteria which must be met before a mortgage offer in principle can be made.
- You want to invest in residential properties
- You can afford to take and understand the risks of investing in property
- You already own your own home
- You have a good credit record and aren’t stretched too much on other borrowings
- You earn £25,000+ a year. If you earn less, you might struggle to get a lender to approve your buy-to-let mortgage
- You’re under a certain age. Lenders have upper age limits on their long term borrowing
We offer advice and assistance to all, whether it is a company with a strong portfolio of properties, individuals looking to start the first part of growing their portfolio, those looking to ensure they have a tangible pension, and individuals who have a few properties under their belt already.
Difference to a normal mortgage
Although similar, there are some differences you will need to be aware of before you start.
- The fees can be greatly increased
- Interest rates on buy-to-let mortgages are higher
- The minimum deposit for buy to let mortgages is usually 25% of the property’s value (although it can vary between 20-40%).
- Most buy to let mortgages are interest-only. This means you pay the interest each month, but not the capital amount. At the end of the mortgage term, you repay the original loan in full. You can find repayment products.
- Most buy to let mortgages lending is not regulated by the Financial Conduct Authority (FCA). There are exceptions, for example, if you wish to let the property to a close family member (e.g. spouse, civil partner, child, grandparent, parent or sibling). These are often referred to as a consumer buy to let mortgages and are assessed according to the same strict affordability rules as a residential mortgage
Mortgage options available
There are many products when it comes to what is the best option of the mortgage that you will be able to obtain. Contact our experts at InvestGrow Financial Services and we can explain in more detail the best way that fits for you.
What is the LTV rate offered?
We offer mortgage products from different lenders, so the loan to value rate that you can find is dependant on the lender and product. Ask us for advice and we can inform specific to your needs.
How do I apply?
To apply for a buy to let mortgage whether as an individual or commercial business, please speak to one of our advisors and we can begin the process. Contact us here on the enquiry form below, or start an instant chat with one of our experts.