Buy to Let Mortgages

There are 2.5 million landlords in the UK

Buy to Let Mortgages are popular in the UK. If you are renting out your property or starting a property portfolio, getting the best Buy to Let Mortgage in the UK is essential.

Buy to Let Mortgages South Coast

What constitutes a Buy to Let mortgage?

Buy to Let Mortgages used to be the preserve of niche lenders and specialist Buy to Let Lenders. If you buy a property, literally, any property and then rent it out, you may NOT get a standard mortgage. Sure, you can buy it for cash but if you take out a mortgage it ‘must' be a Buy to Let Mortgage. The rate will be higher, always, and income verification will be different.

How much can I borrow?

Every specialist BTL lender in the UK works on a formula that looks at the monthly rent received. You always start with a 75% LTV (Loan To Value) then ‘stress test' the rent to see if it is enough. Any whole of market advisor will be able to tell you how much of a deposit that you will need. An average amount of rent – figure on a 25% deposit – and it will never get below that sum. However – many people in some areas receive a lower level of rent and are surprised when they are asked to put up a 40-45% deposit.

How can you make money on a Buy to Let?

There are only two reasons why one becomes a landlord. There is the possibility that the property will go up in value – in the long run, ALL properties go up in value – so you can harness the capital gain, and any rent received will provide an income even after paying off all the debts, including any mortgage payments. We are right in the middle of reductions in interest as a deductible expense. Interest has gone from 100% deductible to what will be 20% eventually – so it is even harder to make a regular profit per month by the part-time landlord.

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Is there a different process than buying a standard residential home?

Most residential lenders also do Buy to Let lending as well, and the processes are similar, you still need a solicitor, you still need a valuation – the income check is always based on the rent and not the individual – but the similarities are there.

BRAM VIS
Frequently Asked Questions: 

What is buy-to-let mortgage?

The definition of a buy to let property (sometimes referred to as 'buy to rent' or 'BTL') is a type of property investment, in which the investor becomes a landlord and rents out the property for profit. A buy to let mortgage is a loan secured against one of these properties.

How much can I borrow?

Every lender will be different in their approach in terms of to what you can borrow – there simply is no set formula. The actual amount that you are eligible to borrow will be determined by the cost of the property you wish to purchase, the size of deposit you have, your income and affordability (taking into account your monthly financial commitments and any future commitments). As a complete rule of thumb – and it is different from all

What kind of fees will I incurr on taking out a mortgage?

Typically the list of fees could include:
1. Valuation fee – charged by the lender to value the property and generally paid up front with your application
2. Legal fee – charged by the solicitor to complete the conveyancing transactions on the property. Part of this is paid up front when the solicitors are instructed but the remainder is paid upon completion.
3. Stamp Duty Land Tax (SDLT) – a tax levied by the government on any property purchase above £125,000. Always calculated by the solicitor and paid over to HMRC by them.
4. Lender arrangement fee – charged by the lender for arranging the loan. This is nearly always added to the loan but will therefore increase the size of the loan.
5. Booking fee – charged by the lender for booking the funds for your mortgage and typically charged up front with your application
6. Broker fee – will be charged as follows:
i) On application of the mortgage £295
paid directly by you, the customer
ii) On successful completion and funds passed 0.5% of the mortgage
paid by the solicitor, typically

Where can I get more information?

Please visit our FAQ page here or contact Bram directly and/or get a confidential & professional call back from Bram here.

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020 7504 1090

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01983 642 643