What is buy-to-let?
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In its simplest form, buy-to-let is where a property is bought specifically to be rented out to tenants rather than lived in by the purchaser.
Investors can make money this way by generating an income via the rent charged (so long as it's more than the monthly buy-to-let mortgage repayments), making a capital gain when they come to sell or, in many cases, both. But, like all investments, there are risks attached to buy-to-let. For example, you could be hit by rising interest rates, stuck with difficult tenants or unable to sell if the housing market changes. We are experts in Buy to Let mortgages, our advisors have a wealth of experience with both individuals, Ltd company Buy to Let, portfolio landlords as well as complex incomes. Regardless of the complexity of your situation and circumstances we can explore potential financing routes available for your situation. |
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What is a buy-to-let mortgage?
If you can’t buy your investment property outright, you'll need to apply for a mortgage. But this will have to be a specific buy-to-let mortgage. A standard or 'residential' loan is only relevant when you also plan to live in the property. There are a number of differences between a residential and buy-to-let mortgage, and they start with the way your affordability is calculated. Instead of your salary, the lender will view the potential ‘rental income’ of the property as your primary income source. Many lenders will then take your personal income into account as a secondary factor. The financial leeway factored into rental cover calculations accounts for non-rental payments and 'void' periods when the property is without tenants. It reassures the lender you will still be able to meet your mortgage commitment. A deposit on a buy-to-let mortgage also tends to be bigger than the one required for a standard loan. Most buy-to-let lenders expect a deposit of at least 25% and the very cheapest deals usually require 40% or more. |
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A MORTGAGE IS A LOAN SECURED AGAINST YOUR HOME OR PROPERTY. YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT. CLICK HERE TO SEE OUR FEE INFO
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME OR PROPERTY. THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST FORMS OF BUY TO LET MORTGAGE.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME OR PROPERTY. THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST FORMS OF BUY TO LET MORTGAGE.
