Landlord Package

Three identical 'To Let' signs hang on terrace houses

Whether you’re investing in your first Buy to Let property or you’re an experienced Landlord, we’re here to help. Renting a property out has become quite attractive, as the long-term returns have been known to be quite healthy to say the least. Unlike in the past, it has never been easier to access a Buy to Let Mortgage. However, it can still be quite a minefield and getting the right mortgage advice is as important as finding the right property.

This is where we can help! Our experienced Mortgage advisors will discuss the process with you, tailor their advice to your circumstances and answer any questions you may have. They will then search the whole of the market and create a bespoke package for you including the most appropriate mortgage protection options. When you have chosen the options you want, we will ‘hold your hand’ through the whole process, keeping in regular communication with you and liaising on your behalf with 3rd parties when you require extra assistance.

Types of Buy to Let Mortgages:

Buy to Let Remortgage

Buy to Let Mortgages With Bad Credit

Buy to Let Secured Loans

HMO Mortgages

Portfolio Landlord Mortgages

First Time Buyer Buy To Let

Limited Company Buy To Let

Some common questions we get asked regarding Buying To Let:

A Buy to Let Mortgage is a mortgage that is secured on a property purchased for the purpose of being let out to tenants. Over the years the popularity of Buy to Let Mortgages has increased. 

 

Set up costs and product rates are different to a standard Residential Mortgage, as is the lender’s assessment criteria. It is usually based on your personal circumstances as well as what a lender will deem as the open market rent that could be achieved from renting the property.

You can get a buy-to-let mortgage under the following circumstances:

  • You want to invest in houses or flats.
  • You can understand and afford to take the risks of investing in property.
  • You have a good credit record and aren’t stretched too much on your other borrowings, for example, credit cards.
  • You earn £25,000+ a year. If you earn less than this 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, typically between 70 or 75. This is the oldest you can be when the mortgage ends not when it starts. For example, if you’re 45 when you take out a 25-year mortgage it will finish when you’re 70

Things to consider and discuss with our trusted, experienced advisors:

Mortgage costs: Your buy-to-let mortgage rate may vary according to the type of mortgage you go for – make sure you’ve factored in any extra costs in the future as well.

Rental income: How much you can borrow is going to depend upon what rental income you’re likely to achieve. Your lender will have a view but it’s useful to do your homework.

Unlet periods: As well as considering the rental income, remember there may be times when your property isn’t rented out. Make sure you have savings or other income to cover for those periods.

Landlord Fees to take into consideration:

Letting agency fees: A letting agency will charge fees to manage your property.

Stamp duty: When it comes to buying the property, there’s now an additional 3% stamp duty to pay on buy to let mortgages.

Maintenance costs: You’ll also need to make sure that you build in an allowance for maintenance costs. Things do break down and repairs will be your responsibility.

Health and Safety legislation: You will need to ensure that you can comply with all health and safety regulations.

One of the most common questions asked when someone is considering a Buy to Let Property purchase is how much deposit is needed.  The simple answer to that question at the time of writing is 15%. 

However, this is where we can help! We will discuss with you the current right deal when you enquire.

Most buy-to-let mortgages are interest-only loans and therefore the monthly repayments can be cheaper than a repayment mortgage. However, you’re likely to need a deposit of at least 15% before you’re able to borrow and overall fees tend to be higher.  

The amount you are able to borrow is also worked out slightly differently, being based on potential rental income as well as loan-to-value ratio (LTV).

Buy to Let Mortgages are normally available to people who already own a residential property or live in their own home.

However, there are lenders who are happy to do business with applicants who “own” property rather than “own/occupy”. You will need to provide full details of your current investment portfolio together with rental and income evidence.

It may be more difficult to get a Buy to Let Mortgage as a First Time Buyer, but it is by no means impossible. A lender would normally expect you to be able to afford the loan on a residential basis.

As well as borrowing money in your personal name, mortgages are available to Limited Companies that are specifically created for the purpose of owning and renting property. 

Good advice from a suitably qualified accountant or tax specialist will help you decide if this is the best way forward in your situation. We can recommend Accountants to assist you in this regard.

INTEREST ONLY:

You pay only the interest on the loan and nothing off the capital. This means that at the end of the term, you’ll still need to find the funds to pay off the outstanding capital balance.

REPAYMENT MORTGAGE:

You pay off the interest and some of the overall cost of the property each month. At the end of your repayment term, you’ll have paid off both the price of the house – the capital – and the interest on it.

Not sure which one is best for you? That’s where we can help! Our trusted and experienced advisors can recommend which would be most suitable in your circumstances.

FIXED RATE: 

With a  Fixed Rate  your interest rate and your monthly payments will remain the same for an agreed length of time – usually fixed for two, three or five years, but other terms are available. 

However, it does quite often carry a slightly higher rate than a Tracker Rate. But you are protected from any rate rises made by the Bank of England to their base rate.  

At the end of the deal, you’ll usually be switched to your lender’s standard rate of interest unless you re-fix or switch. 

VARIABLE RATE:

A Variable Rate will quite often be slightly cheaper than a Fixed Rate, but at the same time carry the risk of rising along with any rises made to the Bank of England base rate. 

They’re usually either tracker mortgages– where the interest rate is fixed at a rate above the standard Bank of England base rate. Or fully variable – where the lender decides on a rate and can change this at any time. It can sometimes be attractive to an investor as with a Tracker Rate you can also benefit from any rate reductions made to the Bank of England base rate as your rate will also reduce along with it. 

Not sure which one is best for you? That’s where we can help! Our trusted and experienced advisors can recommend which would be right in your circumstances.

A Buy to Let Mortgage is generally available on a wide range of property types, although there will always be a number of styles of accommodation that need a specialist approach or indeed will not be suitable.

Leasehold properties are perfectly acceptable subject to the terms of the lease. Normally, any remaining term on a lease would need to be at least 70 years. A shorter term will affect the term of the mortgage and potentially the current value of the property. In the event that the lease is not suitable because of the term, a new or extended lease may be negotiated with the current owner and the Landlord.

As with a Residential Mortgage, mobile homes and houseboats tend to be excluded by lenders as suitable security.

Certain types of property may need consideration by a speciality or niche lender.

For example;

  • Studio Flats with a very limited living space.
  • Ex Local Authority Flats in larger blocks and/or with deck access.
  • Flats above certain types of commercial property, typically fast food outlets.

A lender may also take into account any other property you have in the same street/postcode area in order to limit their risk and exposure to that area.

As each lender will have a different approach to certain types of property, contact us to discuss your specific situation and we will guide you through the process. By doing this, you are more likely to avoid the disappointment of being declined by several lenders before the correct solution is achieved.

You cannot use the Help to Buy scheme towards the purchase of a 2nd or Investment property.

The Government Help to Buy Scheme is in place to help people get on to the property ladder or move up the property ladder.

Any property purchased with the assistance of Help to Buy must be occupied by the borrower.

In some cases, a residential mortgage will have a clause that stops you from renting out your property to make money, including AirBNB style rental. Lenders have different policies on this and its best to check first. Ignoring that, and going ahead anyway could land you in trouble.

LANDLORD INSURANCE
We can search the whole of market to find you the right deal on your Landlord insurances to ensure you have all the protection you need.

SOLICITOR INSTRUCTION
If you need help in choosing a solicitor, feel free to use our solicitor quote tool to help you choose a fixed, competitively priced solicitor.

MORTGAGE CALCULATOR

CASE STUDIES

Andy Rowden Mortgage and Equity Release Expert

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Dan Rowden Director of The Financial Detectives

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THE KNOWLEDGE HUB

Q. What is a mortgage?
A. A mortgage is a loan taken out to buy property or land. Most run for 25 years but the term can be shorter or longer. The loan is ‘secured’ against the value of the home until it’s paid off. If you can’t keep up your repayments the lender can repossess (take back) your home and sell it so they get their money back.

Q. How much deposit do I need?
A. Usually a minimum of 5% of the purchase price. The bigger the deposit, the better the interest rate, the lower your monthly repayments, the cheaper the mortgage. The difference between a 5% and a 10% deposit is huge: the next big jump is at 20%, then 40%. So if you have any chance of pushing yourself up a band (or perhaps ask your parents to help), do it!

Q. What does ‘LTV’ mean?
A. It stands for ‘loan-to-value’ which is the percentage of the property value you’re loaned as a mortgage. In other words, its the proportion that you’re borrowing.

WHY USE THE FINANCIAL DETECTIVES?

      We have access to the whole of market, including exclusive rates not available on the high street.

      We’re an independent, family run business – we are not ‘tied’ to any lender, insurer, solicitor or surveyor. We can therefore give broad, unbiased advice.

      We have 20 years of mortgage and insurance experience, therefore our advice can be trusted.

      We don’t get paid until the case completes so we have as much incentive as you to get your case completed!

      5 star Google and Facebook reviews proving our commitment to exceptional customer service.  We give our clients a dedicated advisor and processing team, who will ‘hold your hand’ throughout the entire process.

Did you know?

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