Getting A Buy To Let Mortgage
If you’re considering buying a property to rent out and earn an income from, a buy to let mortgage is the product you will need to achieve that.
From someone looking to become a landlord for the first time to more experienced people with an existing portfolio, buy to let mortgages are designed specifically for you.
As a buy to let mortgage can sometimes be more complex depending on our circumstances, we highly advise you to speak to a mortgage adviser before making your first move. An advisor will be able to explain how buy to let mortgages work for the uninitiated and then help you find the absolute best deals available to match your needs, and then further down the line, help with remortgaging.
What Is A Buy To Let Mortgage?
A buy to let mortgage is a type of mortgage used by landlords and potential landlords. This is anybody wanting to purchase a property to rent out to somebody else or landlords looking to increase their existing portfolio.
There are various reason people choose to do this – for many years having a property portfolio has been seen as a lucrative way to boost income, make a living and invest money.
How Does A Buy To Let Mortgages Differ From Homeowner Mortgages?
In many ways, a buy to let mortgage, sometimes referred to as a BTL mortgage, has the same principle as a residential mortgage, you’re borrowing money to purchase a property but instead of living in that property, you will be renting it out to somebody else.
Usually, a buy to let mortgage means you will need a bigger initial deposit and interest rates may be higher than a residential mortgage. This means a buy to let mortgage can sometimes be altogether more expensive. This is because mortgage providers often view BTL mortgages to be riskier than residential mortgages. After all, you are relying on rental income to pay the mortgage in most cases.
The amount you can borrow with a BTL mortgage will depend on how much rent the property you are thinking about purchasing will be able to generate, plus your personal circumstances. This is quite different to a regular mortgage as renting the property wouldn’t be a consideration as you would be living in the house yourself.
In addition to scrutinising earning potential, your mortgage lender will also very likely take into consideration extra costs you will have as a landlord, including maintenance costs, letting agency fees, and insurance.
Who Can Get A Buy To Let Mortgage?
Buy to let mortgages are for anybody wishing to buy rental property and the same conditions and expectations are there as they would be with a regular homeowner mortgage – for example, you have a deposit, are sure you are financially sound/in a position to be borrowing.
What If I Already Own Property And Now Want To Rent It Out?
If you already own a home and want to move to another home and rent out your existing home, a buy to let mortgage could be the answer you are looking for. This is sometimes referred to as a let to buy and the people who do this may be referred to as ‘accidental landlords’.
Is A Buy To Let Mortgage A Good Investment?
As a mortgage broker, we are not here to advise people on the viability of their investments – it is up to you to work out potential costs versus return and whether this is the right choice for you.
However, buy to let mortgages and owning rental property has proven to be a steady and reliable source of income for a range of people, for many years.
Although we can’t advise you on specific investments, we can help you decide if a buy to let mortgage is right for you – in that sense, we can help review your current situation, affordability etc as well as help you understand what a BTL mortgage is and what you would need to obtain one.
Once you have decided to invest in property for the first time, buy more property, or, rent out your own home, we can help you make sense of the products available and offer you our expert advice. Of course, we can also help you find a great deal as we have access to a range of mortgage providers and mortgage deals.
Because a buy to let mortgage can sometimes be more complex than a regular mortgage and there are many differences in criteria and processing, speaking to a mortgage broker or advisor is a great way to get help with the application process. This may be of particular use to those who are thinking of buying their first property or want to rent out their own home.
You may have many questions about your buy to let mortgage, including:
- Is a Buy-to-Let mortgage right for me?
- How much can I borrow?
- What deposit do I need to have in place?
- Does it matter if I don’t currently own a home?
- Will I have to pay stamp duty?
- Can I purchase a property as a Limited Company?
- I am self-employed, can I still obtain a mortgage?
- How do I find a solicitor?
- How much rental income am I likely to achieve?
- What insurance do I need?
We can help answer all the above and ensure your journey to becoming a landlord is as smooth and stress-free as possible.
Please give us a call on 01302 436333 and we will be happy to assist you in any way we can.
Your property may be repossessed if you do not keep up repayments on your mortgage
Not all Buy to Lets are regulated by the Financial Conduct Authority
You may have to pay an early repayment charge to your existing lender if you remortgage.