You might think that you already need to be on the property ladder in order to be able to get a buy to let mortgage – so you may be surprised to be told that this isn’t the case. Our team works with many clients who want a buy to let mortgage for a property that will provide rental income – and not all of these clients have a residential mortgage of their own. Here’s an overview of how to get a buy to let mortgage.
Types of buy to let mortgages
There are two routes which can be taken to obtain a buy to let mortgage. The first is via personal ownership and the second is via limited company ownership. Each client will be different and we assess personal circumstances and can make the appropriate introduction to the relevant professionals to provide guidance and recommendation, as it really does depend on personal circumstances.
Andrew Hardcastle is one of our Mortgage and Protection Specialists and when clients come to him for advice on buy to let mortgages, he will spend time understanding the client’s current position and aims for the future.
Creating a property portfolio
Creating a property portfolio can be used to create an income for now and also an income for future, maybe even creating a legacy for your children or other family members. This could lead to future benefits in relation to ownership of the properties, something which would always be discussed with the appropriate professional adviser.
Requirements & repayments
In terms of qualifying criteria for a buy to let mortgage, a minimum 15% deposit is usually required. It’s worth noting that the market widens out considerably if you have a deposit of 25% or more, giving the borrower much more choice.
The mortgage itself can be interest only or standard repayment. Often, interest-only mortgages are preferred, allowing for more modest monthly commitments. The reason interest only is more popular is that once the mortgage period comes to an end, or the borrower wishes to repay the mortgage, the property would be sold and that sale would, in theory, pay off the outstanding mortgage amount.
How the Tudor group adds value.
If you’re looking to obtain a buy to let mortgage, one of our Financial Services team will start the process by sitting down and reviewing your plans to understand your short, mid, and long-term goals. Our in-house Sales and Lettings team can then sense check figures to ensure that your proposed rental stacks up against the mortgage commitments. We can also help by recommending the relevant professional advisers to work with, if needed.
The team will also talk through stamp duty, in the context of ensuring that the most efficient tax advice is in place – this could be through a referral to a professional adviser.
Andrew says: “We take our clients from start to finish to make sure they fully understand the different route when obtaining a buy to let mortgage. One thing our clients are always surprised by is how easy it can be to secure one of these mortgages. Ultimately, our team is here to advise you and talk through your goals, aims and strategy. It is easier than you think!”.
If you would like to talk to Andrew and team about obtaining a buy to let mortgage, book an appointment today.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE.