It’s common knowledge that learning all about residential mortgages is essential if you’re going to be purchasing a property to begin with. However, that isn’t the only type of mortgage out there – there is also the Buy to Let mortgage to contend with. The main difference between an ordinary mortgage and Buy to Let is the fact that this type is for landlords who purchase a property with the intention of renting it out to tenants. This is the main reason why it’s important to be specific with your broker when it comes to the properties that you’re purchasing. […]

When it comes to owning properties in general, it pays to know the ins and outs of the different types of mortgages available today. This is especially important for landlords out there who want to rent a property as a business – for these individuals, the regular mortgage will not do. Instead, it’s all about the Business Buy to Let mortgage, a risky but also a very rewarding form of mortgage that can vary quite a bit from lender to lender. Aside from the normal Buy to Let mortgage, there is also another form known as consumer Buy to Let […]

All things considered, mortgage can be a rather overwhelming process if you don’t know how to properly tackle it. However, traditional mortgage is definitely much easier when compare to something like a Buy to Let mortgage. Compared to simply purchasing a property, the Buy to Let mortgage has to do with renting out the property that you purchase. It might be simple in theory but it’s a tricky venture – risky enough that lenders themselves often have a set of difficult criteria before you can apply for one. There are benefits to be gained from Buy to Let mortgages, enough […]

In the last couple of years, the buy to let market has been presented with challenges, including changes in the tax breaks making it less viable to the investor. Add to it the five percent additional stamp duty along with more stringent lending regulations and the market has become less lucrative to the mass. This has led to is the departure of “casual” landlords from the buy to let market and left the ones willing to be properly committed to it. The upside of this is of course less competition in the market. However, as with anything to do with […]

The housing market is always in demand. This is true for large congested cities where home ownership may not be an option for most people. In addition to this, there is a big requirement for flats and apartments for rent in commercial areas. Estate agencies aim to tap this market by offering properties for rent. If there is no capital to build, companies look to banks for buy to let mortgage. Since this type of mortgage is considered a business loan, borrowers should expect that interest rates are higher than residential mortgages. Obviously, you’ll be required to put down a […]

The buy-to-let mortgage market is a specialised one. In April 2014 the mortgage industry implemented the changes that came from the Financial Conduct Authority’s (FCA) Mortgage. However, finding the best buy to let mortgage does not need to be a complicated process. So, is a buy to let mortgage cheaper than a standard mortgage? Not always. 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 […]

The introduction of assured shorthold tenancies in 1997, which made the rights of tenants and landlords more equal, created the buy-to-let market that exists today. Some say buy-to-let has forced up property prices but there is no doubt it has a part to play as first time buyers are getting older and younger people are renting. The whole point of buying-to-let is for its investment potential – both capital growth on the value of the property and the income it generates in rent. Buy-to-let lending is to support investment, not home ownership. It is important to note that lenders carry […]

When choosing a the right buy to let property, your main considerations are different to those you might apply when choosing a house in which to live. For example, you might not choose to live in an area heavily populated by students, but when looking for rental potential that same area may be exactly what you’re looking for. Choosing the right property with the right rental yields is important. This is true not just for your income but also because you want the rent to more than cover the cost of your buy-to-let mortgage. The Association of Residential Letting Agents […]

If your property will have multiple occupants, you must check to see whether you require a license (www. propertylicence.gov.uk). You will find that this will limit the number of lenders willing to consider your application. Some Buy To Let Mortgages are not regulated by the Financial Conduct Authority. House in Multiple Occupancy mortgages are not regulated by the Financial Conduct Authority.

The type of tenancy agreement will influence the number of lenders who will consider lending to you. A six month assured shorthold tenancy agreement (AST) is acceptable to most providers. Your choice will narrow if you are considering letting to a local authority, a company or housing association. Some Buy To Let Mortgages are not regulated by the Financial Conduct Authority.

A variation on a theme, where you let the home you are currently living in, so that you can facilitate the purchase of your new home. You need to obtain permission to let from your current lender, and they may not agree depending on their appetite for risk. They may also alter the interest rate you pay. You may need to review the market for other options. Your let-to-buy is then treated like a traditional buy-to-let application, and your new home purchase would be a related, but isolated, application. The Financial Conduct Authority does not regulate Let to Buy mortgages. […]

Whether you choose to buy the property in your own name, or that of a company, will have tax implications for you. You may also find that some lenders will not lend to a company, or still require a personal guarantee. You should seek professional advice from a tax specialist. Some Buy To Let Mortgages are not regulated by the Financial Conduct Authority.

Buy-to-let mortgages are not regulated. There are best practices that any reputable mortgage adviser or lender will follow and these are based on the practices and processes that apply in the residential mortgage market. The Mortgage Credit Directive (2016) has also included Consumer buy-to-lets as a regulated product. Consumer buy-to-let is defined as a contract which is not entered into by the borrower wholly or predominantly for the purposes of a business carried on, or intended to be carried on, by the borrower. The legislation sets out a series of circumstances that would constitute a buy-to-let customer acting for the […]

You need to ensure you have enough personal income and resources to maintain payments if your property becomes vacant. This is because your monthly payments to the lender will continue irrespective of your rental situation. Some Buy To Let Mortgages are not regulated by the Financial Conduct Authority.

What may be a suitable return for you, may not be seen the same way by a lender. Typically minimum rental yields are formulaic and driven by two things: the rate used to calculate the mortgage payment a percentage over-ride to allow for any rental void or increases in short-term interest rates which might impact your personal finances (these range between 100 – 130%). Some Buy To Let Mortgages are not regulated by the Financial Conduct Authority.

A tenant that falls into arrears can jeopardise your ability to meet your mortgage repayments. If you fall into arrears with your mortgage repayments you risk losing your property. Rent guarantee insurance covers you if tenants default on their rent and protects your ability to pay your mortgage. Some policies also cover any associated legal costs. Some Buy To Let Mortgages are not regulated by the Financial Conduct Authority.

As with all investments, the value of a property can go down as well as up. Past performance is not a guide for the future. If your mortgage loan exceeds the property value, you will have negative equity. Also factor in the costs of selling, such as using an estate agency, into your net value. However, if you pick the right area, and are realistic about returns, you can reduce the risks. Unforeseen structural problems could prove expensive, so budgeting for regular maintenance is crucial, as is having the right level of buildings insurance. Rental income from buy-to-let properties can […]

The UK government introduced significant changes to tax relief on buy-to-let mortgage interest in 2017, which have been fully phased in by 2020. Previously, landlords could deduct mortgage interest payments from their rental income to reduce their taxable income. However, this system has been replaced with a tax credit. Now, landlords receive tax relief at the basic rate of 20% on their mortgage interest, but they can no longer deduct mortgage interest directly from their rental income. These changes primarily impact higher-rate taxpayers, who once received relief at 40% but now only get 20% under the new system. For some […]

Not all lenders will allow students or DSS tenants, so consider carefully the type of occupant you wish to attract, as it may limit the number of lenders willing to lend to you. Some Buy To Let Mortgages are not regulated by the Financial Conduct Authority.