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BUY TO LET Mortgage

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Your Comprehensive guide to BUY TO LET Mortgages

Take a read at important topics written by Buy to Let Expert Mortgage brokers.
Our comprehensive Buy to let guide details all you need to know about purchasing or Re-mortgaging a Buy To Let Property.

BENEFITS OF USING BTL MORTGAGE BROKER

BTL Mortgage brokers have an insight on mortgage lending policies and procedures which help applications become approved more quickly. They have tirelessly worked on making sure applications are submitted with correct and accurate documentation so lenders will be happy with submission first time. Knowing what the lenders requirements and adhering to their requests is important in getting applications approved first time. Our team of BTL mortgage brokers have an eclectic knowledge between them of not only the mortgage products and lenders but the various types of clients from portfolio landlords to accidental landlords. They guiding you through this heavily driven mortgage criteria to get the best outcome for you.


HOW MUCH CAN I BORROW AS A LANDLORD

When purchasing BTL property, lenders mainly look at the rental income more than the landlord’s salary. Lenders can vary in their requests for income, and some lenders would often like landlords to at least have some form of income. Whilst others specialist BTL mortgage lenders will want a minimum income of £12k to £25k.

However, rental income plays a huge part in how much a landlord can borrow. Most lenders require the rental cover to be between 125% - 170%. A simple calculation can work out a how much a landlord can borrow.

Example -

Loan amount x 5.5% divided by 12 = (X) x 125% = Y (minimum rental income needed)

Loan Amount £150,000 for 2 Years Fixed Product

£150,000 x 5.5% divided by 12 = £687.50 x 125% = £859.38

£21,500 + £35,000 x 4.5 = £254,250

(If the landlord is looking to borrow £150 then they would need to achieve this rental income or above based on these calculations)

This is purely an example of first time landlord who is purchasing property in his/her individual name for 2yr fixed product

This calculation is the industry norm with some lenders and it’s important to note that there are different calculations for landlords who are purchasing through LTD company or HMO (housing multiple occupancy) and their Tax Rate Band.

So it is important you speak to our BTL specialist advisors who have first-hand knowledge and expertise on how other boutique lenders offer a lower rate formula which can allow you to borrow more than the standard calculations offered.

Example 2

Loan Amount £150,000

Loan Amount x 4% (Or can be much lower) divided by 12 = (X) x 125%

= Rent Required

£150,000 x 4% divided by 12 = £500 x 125% = £625

As you can see from the rental calculation above that you can achieve more by using our specialist advisors to find and source the best deals suited to you.


WHY ARE BUY TO LET MORTGAGES POPULAR?

BTL Mortgage Brokers has seen the BTL market over the last 5 years become very buoyant, as we all know the credit crunch made a huge impact on mortgages. Banks were either not lending or had restrictions which made applications very difficult.

BTL Mortgage Brokers have on several occasions experienced instances where clients, due to difficult circumstances, have become accidental landlords. Unable to afford the current mortgage and unable to sell the property. Moving out of their family home to rent somewhere cheaper, while letting their house so they can cover the mortgage payments. Client must inform the lender before considering this option and request a consent to let. Anyone found not getting permission could be in a lot of trouble with their lender.

UK salaries had not increased for years and the average person could not afford the bigger deposits that lenders were demanding. Hence the surge in the rental sector and a mini boom in the buy to let market. Lenders became increasingly innovative in their product offering and attracting landlords with 100’s of new BTL mortgage products, more noticeably in the LTD company BTL range. The market has grown quite considerably due to these circumstances and lenders are seeing more Landlords popping up and wanting to purchase investment properties.


REGULATED AND UNREGULATED BTL

Whilst most clients don’t know the difference, it’s important to make you aware what a regulated and unregulated BTL mortgage would be and why some lenders can offer you certain products and others cannot. Any properties you have lived in or inherited will be classed as a regulated BTL mortgage.

An example of this often occurs when customers have lived in a property but have now decide they would like to move into another property and keep their existing property to let out. This is called a let to buy mortgage but in industry terms classed as consumer (regulated) BTL mortgage. Any regulated mortgage are protected under the FCA guidelines.

An unregulated BTL mortgage is a property that you have not lived in and are purchasing to rent out immediately. This mortgage product will not come under the FCA guidelines as it is an investment property but still has certain rules which are followed by all mortgage brokers and lenders.


BUY TO LET MORTGAGE EXPLAINED

People purchase an investment property for the sole purpose to rent out to tenants. The monthly rental income is used to cover the mortgage payment. This is why some lenders do not take in consideration the landlord’s income / salary to assess the mortgage application. Lenders refer to this as ‘no minimum income’ requirement. However there are other specialist lenders who will require landlords to have a certain annual income between £15,000k to £25,000k. This criteria will be based on your unique circumstances, which our specialist BTL mortgage broker can source and advice you on.

People are becoming increasing aware that purchasing a second home to rent out is a better approach than investing money on the stock market. Seeing a tangible asset that they can touch and feel is more comforting. The property over time is expected to grow in value and landlords will use this equity as there investment growth. Whilst other landlords will use this to supplement their retirement income or purchase another BTL property.


WHY GET A BTL PROPERTY FOR INVESTMENT PURPOSES?

Advantage of property investing – Buying an investment property is the simplest form of investment people can understand. They have a tangible asset they can see and touch, while understanding the value and how it grows. The average person can identify the highs and the lows of a property.

According to globepropertyguide.com house prices in the UK over 10 years has increased by 35.37%. People in the UK can easily follow property prices by using such sites as Zoopla and Rightmove to get an indication and see if there investment is growing. Without the help or guidance of a financial advisor or specialist, they can work out their own investment growth. Thus having investment property is more popular than investing on the stock market with your average person in the UK.

As mentioned before the credit crunch and people’s incomes not increasing has been key factors in the rise of the rental market. People unable to afford deposits to purchase their own home has led to the focus on renting properties. Now a new wave of issues such as Brexit and the Coronavirus pandemic, job losses and struggles people have of saving for deposits is becoming even more difficult. Therefore making the rental market buoyant for years to come.

Disadvantages of property investing

Getting bad tenants who don’t pay rent or the property being empty for a few months which in turn means you have to cover the mortgage payments.

Property prices decreasing when you are looking to sell the property due to certain market situations. The credit crunch, Brexit and now the coronavirus pandemic which has effected all markets not just the UK.

Increased stamp duty land tax (SDLT) because you are purchasing your second home. Capital gains tax if you sell the property with huge gains. Please seek tax advice when considering these options.


RENTAL YIELDS

Like any business, investment properties (Buy to lets) are no different and most landlords will work out the rental yields before purchasing a property to know how much they are actually making from the property.

Most landlords should consider property rental yields of around 6% or over.
This simple calculations is important when Landlords are purchasing numerous properties and managing their returns.
This is calculated as follows: Annual Rent divided by the Value of the Property

Example – Property A

Purchase Price £150k Deposit £37500 (25% deposit)
Loan £112500Monthly Rent £750 x 12= £9000 Annual Rent

(Annual Rent) £9000 divided (Property Value) £150,000 = 6% rental yield


BUY TO LET MORTGAGE WITH BAD CREDIT

The advisers for Buy to let mortgage brokers have worked out a comprehensive table to help customers get an understanding of the BTL market. By simply filling in the enquiry form our specialist BTL brokers can find the right mortgage for you.
In some cases lenders require a higher deposit if you have bad credit, so it is important to speak to one of our specialists to see what you can be offered. With 100’s of BTL mortgage products the experienced mortgage brokers have specialist lenders offering loans with only 20% deposit depending on your circumstances. In some instances they can offer a mortgage with only 15% deposit however a word of caution is they will assess your circumstances before they can offer the latter products.

0 – 6 Months 7 – 12 Months 1 – 2 Years 2 – 3 Years 3 – 4 Years +4 Years
Late Payments (personal loans / credit cards / store cards/ other unsecured credit) Maximum of 2 missed payments allowed on each credit commitment YES ( No Maximum) YES ( No Maximum) YES ( No Maximum) YES ( No Maximum) YES ( No Maximum)
Missed Rent Payments (First Time Buyer) No Yes ( 3 maximum) Yes ( No maximum) Yes ( No maximum) Yes ( No maximum) Yes ( No maximum)
CCJ (County Court Judgement) No YES (Subject to amount) YES ( if 36 MONTHS ago will ignore) Yes Yes Yes
Defaults Help to Buy Only (Subject to lenders discretion) YES (Subject to LTV) YES (Subject to LTV) Yes Yes Yes
Debt Management Plan / Debt Arrangement plan Yes Yes Yes Yes Yes Yes
IVA No Very Unlikely Help To Buy Only (Subject to lenders discretion) Achievable but high deposit needed Yes Yes
Bankruptcy No Very Unlikely Help To Buy Only (Subject to lenders discretion Achievable but high deposit needed Achievable with good deposit Achievable with good deposit
Pay Day Loans No No 0 In last 12 months All outstanding loans to be cleared Yes Yes Yes

INTEREST ONLY VS. REPAYMENT MORTGAGE - BEST PAYMENT OPTION FOR ME?

Mortgage lenders breakdown monthly payments into two different options - repayment or Interest Only mortgage.

Repayment Mortgage – When taking out this method of payment you are paying off the loan and the interest charged. This will effectively pay off the mortgage over the term you have selected, more often being 25 years. A repayment mortgage will reduce the loan you have borrowed but can often be a lot higher monthly payments and because of this people increase the term of the mortgage so that they can have affordable payments. The mortgage term can then be spread over 25 plus years to compensate manageable payments.

Interest only – This is a payment method, where the customer only pays back the interest charged for the Loan they have borrowed. The amount owed will stay the same at the end of the specific deal or term. The reason customers take out this payment option is because the payment method is considerably cheaper, affordable and helps people get on the property ladder. Customers tend to go onto this type of payment for a number of years until their circumstances are a lot better and they have more disposable income to pay the mortgage comfortably. Landlords prefer this payment method as the rent can easily cover the mortgage payments and still have some disposable income.


FIXED VS TRACKER RATES

Fixed Rate – This is the most common rate in the UK today. Most people prefer this rate because it’s easy to budget. Fixed rate mortgage means your payment will be fixed for the duration of your mortgage product offered by the lender. Taking out this rate you will know your monthly payments every month for the duration of your mortgage. This Fixed Rate Mortgage also protects you from the increase or decrease of the Bank of England base rate.

Tracker Rate – This rate tracks the Bank of England (B.O.E) base rate. Your interest payment is normally above the B.O.E rate. If the Bank of England decide to move the rates up or down your payments will change with it. As the Bank of England meet each month to discuss whether to move the interest rates up or down its important to note your payments will fluctuate each month depending on B.O.E.

Example – Current Bank of England Base rate 0.1% and the lender would offer a rate of 0.9% above base so your total interest rate is 1% a month

Term of the Mortgage – This impacts the mortgage depending on which mortgage type the client chooses - Repayment or Interest Only. For residential mortgages the customer often takes out repayment mortgage and therefore a long term mortgage of 25 years plus allows first time buyers or homeowners to spread the payments over a longer term and allowing the monthly payment to be affordable.

However BTL Landlords tend to go for an interest only mortgage and so the term does not have any impact as they are only paying back the interest and the length of the term does not matter.


2 YEAR vs 5 YEAR PRODUCTS - LEND MORE OVER 5 YEARS AND WHY?

All mortgage lenders / banks when offering products will give deals between 2 years and 5 years. However when it comes to BTL products it would be prudent for the landlord when looking to borrow the maximum amount from a BTL property, is to work out the rental calculations based on 2yrs deal offered by the lender. If this does not fit with the Landlords needs then it’s very important to note that 5yr products have more flexibility in lending and mortgage companies tend to be more lenient with rental calculations. This then enables landlords to borrow more on 5yr deal than 2yr deal. Lenders would like to have landlords as a customer over a longer period and thus want you to take out 5 year deal instead of losing you after 2yrs. One thing to point out from Our BTL specialist is that although you can borrow more money on 5yr deal the rate tends to be a little higher.


DEPOSIT FOR MY BUY TO LET PROPERTY

All lenders take risk when lending money to residential or Buy to let customers. Landlords with 25% deposit gives them a greater opportunity to better rates and a vast array of buy to let products. This is not to say that a lower deposit cannot get you a buy to let mortgage it just increases your risk factor to the lender which in turn means the rate will be higher and costs maybe more from the banks or specialist lenders. Some lender can work on 15% deposit and others work on 20% deposit again all based on your credit risk, rental income and circumstances.
Below is a table to illustrate acceptable sources of deposit and how lenders will require the evidence for your Buy to Let Mortgage Application.

Deposit Source What the Mortgage Lenders say Evidenced by
Own Savings / ISA / Life time ISA

Money from Re-mortgaging
The majority of lenders accept this

The majority of lenders accept this
3 Months savings or bank statements to show proof of money acclimated over time

ISA / investments – 12months statement
Bank statement showing proof of funds or solicitors confirmation statement
Family gift – Cash Will accept from family member. Parents, Siblings, in Laws, Grandparents, Auntie/ Uncle (related by blood) Niece / Nephew. Partners living with applicant could be married or Co-habiting. Also Step and half family members are accepted.

Lenders DO NOT accept gift from other sources such as cousins, friends, co-workers, these are not accepted due to money laundering rules and funds could be classed as loans that need to be paid back..
A letter from family member stating gift amount and state knowingly they do NOT want the gift to be repaid back or have any interest in the property
Gifted Equity Will accept ONLY from close family members only such as Parents , Siblings, Grandparents or Children A letter from family member stating gift amount and state knowingly they do NOT want the gift to be repaid back or have any interest in the property
Inheritance Will accept if the inheritance will be paid prior to full mortgage application or currently going through probate. Bank statement showing funds / solicitors confirmation
Sale of Assets Assets such as jewellery, cars and other valuable personal assets can be accepted by the lenders as proof of deposit. Although thorough checks and due diligence will be carried out by the lender, Mortgage Broker and Solicitors to see if no money laundering rules have been breached and funds are legitimate. Evidenced by recipe sale and proof of money deposit or money transaction on bank statement
Loan / Credit Cards /other unsecured credit Raising your deposit by taking out loans or credit cards are not accepted by most lenders. Very few accept this only if the loan or credit cards have been paid back in full. Student Loans are not acceptable Only if the loan / credit card is paid back in full (Subject to lenders direction) Student loans are not acceptable
From Foreign Sources Majority of lenders don’t accept this cause of money laundering rules. As the money can be difficult to trace to the original source. Under special circumstances lenders will need to verify the source and money trail to be accepted

BUY TO LET MORTGAGE COSTS

STAMP DUTY

You will pay a Buy to Let / second home rates when purchasing a Buy to let
Property. Speak to a Buy to Let mortgage expert who will explain to you the
Buy to let stamp duty rates.

DEPOSIT

The amount of deposit you want to put down towards the mortgage.
This can be from your own savings or a gift from a family member.

Some lenders might charge an Arrangment fee for taking out
a mortgage. This can be added to the loan amount.

The lenders will charge a valuation fee.
The valuation fee will be explain and outlined on the mortgage quote
given to you by your Buy to Let Specialist Broker.

ARRANGEMENT & VALUATION FEE

SOLICITORS FEES

from £995 for a Purchase or from £595 for Re-Mortgage.
Ask your Buy to Let Mortgage broker for a referral.

LANDLORD INSURANCE

A Lenders mandatory requirement when taking out a mortgage.
Your Buy to Let mortgage broker can help you with your home insurance. ,

Stamp duty will be one of the main cost in purchasing a Buy to let Property. Most lenders will only accept you for a BTL mortgage if you have a residential mortgage in the background. Therefore you will pay the Buy to let / second home stamp duty rates. In England you will pay an additional 3% Stamp Duty Land Tax (SDLT) for the first £125,000 of the property price and then 5% on the price between £125,001 and £250,000 and 8% on the amount above £250,001.

  • If you're married or in a civil partnership and either partner already owns a property, you'll have to pay the additional stamp duty regardless of how many properties you yourself own.
  • If you are buying a Property through a SPV or a Trading LTD company, you’ll have to pay the additional stamp duty rates.
  • If you buy a new home before selling your old one, you will have to pay the additional Stamp duty rate.  However, you can claim this back if you sell your previous home within 36 months (three years) of buying the new one.
  • Properties under £40,000 are exempt from the additional Stamp Duty Rates.

EMPLOYMENT + INCOME EVIDENCE

When considering BTL mortgages, lenders work on a different formula to a residential mortgage. Some Banks / specialist mortgage institutions have a relaxed approach that landlords don’t need a minimum income. However to give landlords more options and wider range of products it’s important to highlight some mortgage companies expect landlords to have an annual salary of around £12k to £25k. What mortgage lenders priorities when it comes to BTL mortgages is the amount the landlord is looking to borrow and if the rent achieved will cover the monthly payment and have disposable rental income.

This is calculated as follows, loan amount x 5.5% divide by 12 x 125%

Lenders although advertise a lower rate on their mortgage products they still calculate on higher interest rate to consider possible risk. Therefore it is important to remember this calculation when lending on BTL properties. Please take note our BTL mortgage brokers have a lenders panel that can also offer lower calculation figures which can help the customers borrow more.

Example – Loan amount x 4% (or lower) divide by 12 x 125%

Our BTL mortgage advisers have vast knowledge of this sector and have the expertise and a good understanding of the criteria to get you not only the best deals but allow you to borrow more with lower calculations and exclusive deals.

Age

Age has been quite relaxed within the BTL sector as the lenders understand this is an investment property. Lenders have become more flexible and allowed landlords to take the mortgage applications to a higher retirement age. Lenders criteria has allowed landlords to go up to an age limit of 85 and some go to 90years old.

Lenders Criteria

Evidenced By

EMPLOYED

  • Permanently Employed – Annual Salary
  • Must be in continuous employment for more than 6 months and in current role for more than 3 months prior to Full Mortgage Application being submitted.
  • 3 Months Payslips
  • 12 Weeks payslips ( if paid weekly)
  • Personal Bank Statement
  • Details of the last 12 months of employment
  • P60 ( some lenders will request this)
  • Commission / Overtime
  • Lenders will accept 100% to 75% of the averaged earned over 3 months
  • 3 Months Payslip
  • Bonus
  • Will accept 100% to 75% Average over a period
  • 3 Months payslips
  • Personal bank statement showing bonus paid

SELF-EMPLOYED

Sole traders | LTD Company Directors | Partnership

  • Minimum 12 months trading history
  • Sole traders net profit accepted
  • LTD Company directors, salary and dividends accepted
  • Partnerships, will accept your share of the net profit
  • Self-assessment Tax returns ( SA302’S ) and Tax year overview or Minimum 1 years accounts
  • 3 months personal bank statements
  • 3 months business bank statement

CONTRACTORS

  • Income calculated as day rate x 5 (day per week) x 48 (working weeks in year )
  • Continuous employment of 12 months or minimum of 3- 6 months of the contract remaining.
  • Less than 3 months must have written confirmation that employer will renew contract for a certain period of time. This depends on the lender your bad credit mortgage broker sources for you.
  • Copy of current contract
  • Copy of previous contracts
  • 3 months bank statement

LOW TAX BRACKET AND HIGH TAX BRACKET FOR LANDLORDS

Higher rate tax payer – When Lenders assess the rental calculations, they work on a principle that if the landlord is a high rate take payer then the rental calculations will be higher.

Higher rate tax payment – Loan amount x 5.5% divided by 12 x 145%

Low rate tax payers often get better rental calculations Loan amount x 5% divided by 12 x 125%

However, please don’t let this put you off if you’re a higher rate tax payer as our BTL mortgage experts can get lower calculations as they have a specialist panel of mortgage companies that offer exclusive deals with lower calculations. So please speak to one of our brokers today


LTD COMPANY BUY TO LET

LTD company BTL’s have become a very popular way to buy investment properties. By opening up a LTD company with special purpose vehicle (known in the industry as SPV). Landlords are able to offset any cost to the LTD Company. They do not pay capital gains tax and only pay corporation tax, thus paying gains on of about 19%. This tax is a lot less considering an individual BTL, depending on tax bracket, would pay 28% or 18%. Individual cannot offset any costs whilst LTD companies can. LTD companies have no annual tax allowance like an individual would have and more importantly they have tax relief on mortgage interest payment and any up keep of the property. Please note it’s not the landlord who gets tax relief it is the LTD Company so if a BTL property is in the LTD company then tax relief is possible.

The LTD Company is only set up for the purpose of purchasing the investment property and nothing else. Lender are very receptive of this form of lending and are offering a huge range of BTL mortgage products.

Mortgage lenders would prefer to consider LTD companies if they are not trading and solely set up as SPV (special purpose vehicle). Whilst some lending institutions will consider LTD companies that are trading it must be pointed out that there are only a handful which reduces the landlord’s options considerably.


PORTFOLIO LANDLORDS

Landlords who own four or more properties will be classed as portfolio landlords. Lenders consider these landlords to be more experienced and will always ask for more details about the properties they have in the background. So it is very important that portfolio landlords provide full disclosure of the properties and mortgages they have on their books. Some BTL mortgage lenders will only consider 3 to 7 properties in the background but our unique BTL advisers have boutique BTL lenders who would consider more than 10 properties in the background while some have no limit therefore it’s always good to send us an enquiry and see how we can help.

Mortgage Lenders Number of Buy to Let Properties allowed in the
background
The Mortgage Works

Birmingham Midshires
No Maximum

10 Maximum
Aldermore

Accord

LandBay

No Maximum , 10 can be mortgaged with Aldermore

15 in background , 10 can be mortgaged with Accord

No Maximum

WHAT DOCUMENTS & DETAILS ARE NEEDED FOR MY MORTGAGE APPLICATION?

bad-credit-document bad-credit-document bad-credit-document bad-credit-document bad-credit-document
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Free, Quick & Easy, No credit check

  • Proof of ID
- A Valid passport or driving licence showing your full name and date of birth,
Non-European citizens must provide passport and residency card / visa. Visa must have another 2 years remaining. Non-European citizens also must have lived
In the UK for 3yrs or have indefinite leave to remain.

  • Proof of address
These documents must be dated in last 3 months: utility bill (gas electric, water bill, council tax, TV Licence, credit card statement and driving licence. It’s important to point out no lenders accept mobile phone bills.

  • 3 months
Payslips or 12 recent payslips if paid weekly.

  • Latest P60
(some lenders will require this)

  • SA302’S AND TAX YEAR OVERVIEW
(min 3 years or how long you have been trading)

  • Proof of deposit
(bank or ISA savings statement or gifted family deposit letter which our specialist brokers will provide the lenders template)

  • Latest personal 3 months bank statements:
for ALL active accounts, our specialist brokers will need to show the lenders your daily and weekly spending and your salary going into your account. So if you have two or more bank accounts please provide based on the above info
Bank statements Criteria- lenders now request all bank statements to meet the following criteria:
  1. A full 3 months – This must not have any pages missing and they require the statements to be from the 1st of the month to the end. So if up the application is on 01/04/2020, then back dated from 01/01/2020 to 31/03/2020.
  2. Identifiable to you or partner (if joint bank account) – must have your name(s), address, account number and bank name on statement.
  3. Online statements – must have identifiable information and ideally the web URL on the bottom. Bank prints – must have identifiable information and a branch stamp and signature, ideally on every page

  • Credit report:
If history of adverse credit then Experian, Equifax, check my file or clear score will be needed so the bad credit mortgage brokers can assess your history to get the right mortgage for you.

  • Proof of rental income (if Re-mortgaging)
– 12 months bank statement show rent being paid or your current landlord reference letter.

  • Tenancy Agreement (If Re-mortgaging)
– 6 to 12 months AST to show proof you are renting out the current property.

  • 3 Months Business bank statements
– whilst the lenders does not always require this the more information our broker has they can speed up your application process.

  • 3 years Business Accounts
( Self Employed Applicants only, not all lenders will request)

  • Estate agent details:
name, address, email, contact number for valuation, again providing this to the broker will allow them to process your application efficiently.

  • New property details:
address, construction material, approximate year of build, detachment type, garage or number of parking spaces, number of bedrooms/bathrooms/kitchens/other rooms. The details can be very important when applying for a mortgage as for example there are certain restrictions with lenders accepting particular construction property types, certain flats in high rises, or floor space which means details such as these can affect the application process and so the more our specialist brokers know about the property the greater chances they have of getting the right lender and having your mortgage approved.

  • Solicitor details:
Name of solicitor, name of acting solicitor, email address , phone number With any mortgage transaction you will need a solicitor / conveyancer. They are the legal entity who help customers conduct searches on the property and comply with the instructions of the mortgage company when the offer is produced. They request the money from the lenders and distribute to the seller or mortgage lender depending on a purchase or remortgage application.


LEASEHOLD PROPERTIES

With so many High rise buildings across the UK being built and people jumping to purchase flats to rent out, it is becoming very important knowing more about the type of property being mortgaged. We have seen a sharp increase in landlords splitting houses to make studio flats or refurbished apartments so property types can be an important factor when considering what BTL lenders to choose.

Our BTL mortgage brokers are more than equipped to understand the type of properties out there and the questions that need to be considered when going through an application process with customers.

Most leasehold properties need to have minimum 99yrs or above to have the mortgage approved easily, anything below this can greatly reduce the mortgage product options. Flats with balconies or flats with low sq. footage need to be assessed as they will have a bearing on the application. Our BTL specialist mortgage brokers will source the lenders based on these factors so you will be in good hands.

Maisonette are another contentious type of properties that banks and boutique lenders would consider knowing more about. If the landlord owns the building with two maisonettes then in some instances the banks would only lend on one. They don’t like the risk of exposure so prefer to lend on certain percentage of the building.


MUFB –MULTI UNIT FREEHOLD BLOCK

If the landlord owns a building with 4 flats, this would be referred by lenders as a multi-unit freehold block or MUFB. This is very common with our BTL mortgage experts , and they have Specialist lenders would consider these types of properties. Some mortgage institutions would either like to lend on the whole building or a percentage based on the deeds of the property. This is why it is so important to note that BTL Mortgage Brokers source very highly skilled advisers for these specific applications. As lenders will want to know more about the deeds of the property and will base their lending on the titles being split or not. So it is always good to speak to BTL Mortgage Brokers chosen specialist consultants, who understand what you need to provide so they can research the best products on the market.

It is always very important to confirm this at the beginning of any applications so our experienced advisers recommended by Bad Credit Mortgage brokers can present the right lenders for your portfolio or MUFB.


HOUSE IN MULTIPLE OCCUPANCY (HMO) / STUDENT LETS

Another type of property is HMO (housing multiple occupancy) / Student Lets. These types of properties are the bread and butter of most experienced landlords. These are buildings which landlords would rent out to students or professionals by the number of bedrooms they have. In most cases the landlord would have one communal living room and kitchen with the rest of the rooms let out. Charging each person per room who lives at the property. Depending on the cities the landlords have their respective HMO/Student Lets properties, most will need a HMO licence to rent out them out. Anything over 4 rooms let would more often require this licence but it’s always prudent to check with your council their specific rules. Health and safety is key in houses like these and there are certain regulations landlords must adhere too.

So if you are a First time landlord, have an extensive property portfolio or an experience landlord who wants to own HMO or MUFB. Choosing to use our BTL mortgage brokers will give you an advantage. There are so many variables to consider which is why BTL mortgage Brokers will take away all these issues from you and present the perfect option. From complex leasehold flats in high rise buildings to refurbish apartments, maisonettes or just a standard property, BTL mortgage Advisers have done them all. So you relax in the knowledge that our experienced BTL brokers will find a suitable BTL mortgage product for you.


BUY TO LET REMORTGAGE

As a landlord looking to remortgage your BTL property, it’s always good to talk to one of our experienced BTL mortgage brokers. With over 300 different BTL mortgage products they will guide you to the right deal to suit your needs for now and in the future. Our BTL advisors can work out a strategy for you to help build a portfolio or just look at ways to help reduce your mortgage balance so in years to come you can have enough equity to use for retirement or other ventures. Some Landlords like to purchase another BTL and want to see how much they can borrow or others just want a better rate. Whatever you need our expert BTL adviserscan find you the right BTL product and help you grow your investment.


LET TO BUY & CONSUMER BTL

Renting out your current home to buy a new home to live in.

These terms are often used when a home owner is deciding to purchase a new property but wants to keep their current home to rent out. Homeowners tend to remortgage to borrow more money from their current home to use as their deposits for the new purchase. When remortgaging all lenders are now asking proof of a new purchase if you’re current residential home is being put onto a BTL mortgage product.

Lenders are happy to consider this as long as the home owner is moving into the new property and must provide onward purchase details. If you decide to do this, simultaneous mortgage applications will occur, one for a let to buy and one for the new residential purchase. This provides proof of onwards purchase and BTL lenders will only accept when the new residential mortgage is offered. Our BTL mortgage experts have knowledge and understanding to make sure both mortgages are offered around the same time so it can be a smooth transition.


AST AGREEMENT - ASSURED SHORTHOLD TENANCY AGREEMENT

This is an agreement between the landlord and the tenant renting the property. This agreement is usually about six months but can run longer depending on your landlord. Most prefer 6 months agreement as tenants circumstances can change during and for Landlords it gives them the option if they have bad tenant to give notice after this time. If the Tennant is willing to continue after this date then they don’t sign another agreement unless the landlord specifies.

When remortgaging BTL properties, lenders do like to see the tenancy agreement and the rent going into the landlords account to show the property is being properly managed by the landlord. Lender like to see the correct procedures followed so that when lending they can satisfy themselves that the landlord is competent in managing the property to pay the mortgage effectively.

A questioned always asked to our specialist BTL advisors is, Can I purchase a BTL property which is empty. The answer is YES, most lenders prefer to the property to be empty when purchasing as it make it a lot easier not taking the previous landlords obligations. However just to note if you have tenant in the property when buying this is also ok but the lenders will require a copy of the tenancy agreement.


BUY TO LET MORTGAGES FOR EXPATS

Simple answer is yes.

Please send us in your enquiries and we can discuss each case on its merit. Please note Expat must have minimum income of £40k sterling equivalent. Whilst some lenders do require a UK bank account and a credit footprint in the UK.


MY BUY TO LET MORTGAGE APPLICATION PROCESS

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Free, Quick & Easy, No credit check


PROTECTING YOUR BTL PROPERTY - LANDLORD INSURANCE

Please be aware any landlord looking for BTL Insurance to cover their property our BTL advisors can help. Their in-house insurance systems will allow them to get you a quotes within minutes.


SPEAK TO A BUY TO LET SPECILAIST BROKER

If you are looking to purchase or remortgage a Buy to Let Property or if you think you may have some credit issues that may affect your application.
There is no need to worry, you can speak to someone at Bad Credit Mortgage Brokers who will find the expert broker for you. It is important that you get the correct advice and support.

A specialist Buy to Let adviser who has whole of market knowledge and products can help you find the right mortgage for you, saving you the time and money.

Free, Quick & Easy, No credit check


FCA disclaimer

The information written is a relevant and comprehensive guide for visitors to read about the mortgage industry. The information collated is based on current mortgage lending criteria and polices. We endeavour to keep the website up to date but the information may vary from time to time as lenders change their criteria based on evolving financial climate. Please be aware the information and guidance written is not specific to an individual and does not constitute advice or guarantee a mortgage. The industry experts we introduce are qualifiedto give mortgage advice and are regulated by Financial Conduct Authority. All advice given by the advisors will be based on your specific requirements and circumstances.Your Home may be repossessed if you do not keep up repayments on your mortgage. Thinkcarefully before you secure any debts against your property. The Financial Conduct Authority does not regulate some forms of buy to let mortgages.