Buy to Let Mortgages - All Circumstances Considered including Buy to let for Bad Credit individuals
What is a buy to let?
A buy to let is exactly what it says! You purchase a property with the objective of renting it out.
There are a limited number of lenders who operate in this market place these days; however those that do will lend up to a maximum of 80% against the value of the property. As an example; if the property you are buying is £100,000 the maximum amount (subject to under-writing criteria) borrowed would be £80,000 so in other words the deposit of £20,000 would have to be provided by the applicant themselves.
As a general rule of thumb, providing that the potential rental income on the property covers the mortgage payment by an extra 25% or more of the mortgage payment, (i.e. if the mortgage payment on the buy to let property was £400 the surveyor would have to satisfy himself that the potential rental income on the proposed property was £500 or more) then the assessment for affordability is based on the rental income and generally not on what income the clients receive or what other commitments they may have, although lenders always reserve the right ultimately to look into this in case where perhaps they may feel clients are over committed personally but generally speaking it is a self funding exercise based on the anticipated rental income.
There are various schemes available at different interest rates etc and repayment terms can usually be done on a repayment basis or on an interest only basis.
Again, all enquiries initially to be made by telephone or email and a decision can normally be provided within ten minutes.
More Information on buy to let
A buy to let Mortgage is a loan which is secured against a property that is rented out by tenants, and is not lived in by the purchaser or owner. It is therefore considered an ideal investment opportunity, if you have the initial finance to start with.
With the popularity of letting a property rather than buying it appealing to more and more people, particularly after the recession, buy to let Mortgages have become popular in recent years.
Many young people cannot step onto the property ladder as easily as before. This is because it can be difficult for younger people to save for a large deposit necessary for the mortgage (in some cases this might be around £50,000) and so the only other option would be to rent a property instead.
Buy to let Mortgages are ideal for landlords who need to finance their investment opportunity, and take advantage of the increasing rental market.
The affordability of getting a buy to let mortgage depends on various factors. One is the deposit that you can put down on the property (usually 20% minimum). Calculations must also be made as to the property's rental possibilities. The property needs to be easy to rent out and attract tenants, as well.
The process can take three to four weeks on average, depending on the borrower and the property in question. All applications can be fast tracked. The lender will also charge a fee on buy to let mortgages.
Existing landlords who already have properties on a buy to let can remortgage these to raise additional capital providing that there is sufficient equity to do it. For further details on this may we invite you to contact us to discuss.
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