Why consider buy to let?
The main advantage is having someone else buy your property for you through the rent they are paying. Mortgage deals are pretty sharp these days, and profit from rent can be attractive. Tax reliefs are gradually being reduced, but it is still be possible to obtain 20% tax relief on mortgage interest.
How much deposit is required?
The best deals require a 25% deposit, and the greater the deposit the better the deal. It is possible to obtain a buy to let mortgage with only a 20% deposit from some lenders.
Will lenders consider you?
First time buyers are not generally acceptable, but if you have owned your home for a minimum period of time, and have separate employed or self employed income, you are likely to be considered. For those who are higher rate taxpayers, it can be an advantage to put a spouse on the mortgage instead, who may even be a non taxpayer. This is not available with all lenders.
Income from rent
Due to new legislation in October 2017, rental income must meet more stringent tests, but in most cases it does. If you own four or more properties, then you will come under the new Portfolio Landlord rules, which are more exacting, but again, we can help you by placing you with the right lender.
Income from employment
Most lenders have a minimum requirement for separate income, but their rules vary. Again we can determine the best lender for your particular circumstances.
Are there any differences in lenders criteria?
Lenders all have their own rules, which cover everything from income, rental income, how many properties you have, to the property itself. We do all the hard work, to find out which lenders can do the job for you.
What to look out for
Reduce your risk by not buying a lot of properties in the same area. Don’t buy in areas where it may be hard to sell. Be careful of buying ex-local authority flats where a number may still be owned by the council. Vet your tenants carefully. Consider insuring against loss of rent in periods of unoccupancy. Get advice on tax matters before you start. Get a good mortgage advisor, (us!).
With our knowledge and experience we can get you off to a good start, and help to make your venture profitable.
The FCA does not regulate loans and some forms of Buy to let mortgages.
For mortgages there will be a fee of usually £100, and we will also receive a payment from the lender.