Buy to Let Mortgages
Understanding the workings of Buy-to-Let mortgages (BTLs) in the property investment sector is key. Whether you are a first-time landlord or have experience in property ownership, here at SAM Mortgages, we help property investors obtain suitable financing to meet their objectives.
Your home may be repossessed if you do not keep up with repayments on your mortgage.
There may be a fee for mortgage advice. The actual fee you pay will depend on your circumstances. The fee can be up to 1% but the typical fee is 0.3% of the amount borrowed. There is no guarantee that the property will be continuously let or that rental income will cover the cost of your mortgage.
Most Buy-To-Let Mortgages are not regulated by the Financial Conduct Authority.
What is a Buy to Let Mortgage and How Does it Work?
A Buy to Let mortgage is intended for anyone who wants to buy a property to rent it out to tenants. Unlike a normal residential mortgage, where the property is primarily for you to live in, this type of borrowing focuses on the income the property will generate from tenants.
Generally, you need a bigger deposit than you would with a residential mortgage, and the lender will also assess if you can cover the repayments with the anticipated rental income. Other considerations, such as the location of the property, demand in the rental market, and continuing management fees, will also be important in your investment decision.
How Much Deposit Do I Need for a Buy-to-Let Mortgage?
Most lenders will expect a deposit between 20% and 40% of the value of the property. The percentage will depend on your financial situation and the lender’s own criteria, as well as market conditions. Generally speaking, the more you deposit, the better the mortgage will be. Larger deposits often result in a more attractive mortgage, and in many cases, lower rates and a greater chance of being approved.
What Are the Criteria Lenders Use for Considering a Buy-to-Let Mortgage?
Lenders will pay more attention to the anticipated rental yield from the property and will not scrutinise your income as much as they would when considering a residential mortgage.
Nonetheless, factors including will still be examined:
– Your credit record and financial responsibilities
– Your earnings or employment status
– If the anticipated rental income comfortably exceeds the mortgage repayments
This suggests that even if your income is low, a sufficiently robust rental return from the property may qualify you.
Your Buy to Let Future Starts Here
Investing in property can have fantastic returns, but it also has responsibilities and risks. That’s where SAM Mortgages comes in. We do not just arrange mortgages for you, but we will walk with you through every part of your investment journey.
With years of experience and deep market knowledge, we help landlords get competitive finance solutions that meet their objectives. Whether you are purchasing your first rental property or expanding your portfolio, our team will provide useful advice and continuing guidance.
– Call 01604 261685 to discuss your options in Buy to Let.
What is the difference between a Buy to Let mortgage and a Residential Mortgage?
The difference is mostly the intention for the property. Residential mortgages are for buying a property to live in, whereas a Buy to Let mortgage is designed for the purchase of a property you intend to rent out.
There are other differences
Higher rates of interest – Buy-to-Let products are typically more expensive than residential mortgages.
Deposit expectations – You will be asked to provide a larger deposit, likely 25% or more.
Affordability checks – Your affordability is based on the rental income rather than just your salary.
Frequently Asked Questions
Who applies for the Buy to Let mortgage?
Will I need to have my own home in order to apply for a Buy to Let mortgage?
What happens if I am not able to find a tenant?
Can I use the rental income to cover all the costs?
Will you tell me how to run my business?
Are you a data controller or processor?
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How Much do you need?
Use our mortgage calculator to arrive at a rough estimate. However, please keep in mind this is only a guideline, as your best option is to leave it to one of our mortgage advisers to determine and show you before making any conclusions.
