Buy to Let Mortgage Advice

Choosing the right mortgage is essential

Whether you are investing in buy-to-let properties for the potential income or for the potential capital appreciation, choosing the right mortgage is essential.

There are many factors involved in getting a new mortgage and the process may seem complex and time-consuming. Our expert mortgage advisers will support you at every step and do most of the work for you. Simply contact us and we can guide you through a buy-to-let mortgage from start to finish.

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It is always a good idea to understand what’s happening, so read on to find out more about what is involved and how to ensure you’ll find a mortgage that is right for you. These are some of the most common questions we are asked.

1. What is a Buy-to-Let Mortgage

Buy-to-let mortgages are designed for those looking to purchase and then rent out a property.

They can be a little more difficult to acquire which is why an expert mortgage adviser’s help can be invaluable.

Buy-to-let mortgage rates will typically be higher too, while the amount you can borrow will depend more on how much rent the property will generate rather than your own salary.

Like any form of investment, there’s a lot to consider before you decide. This simple, straight forward guide should help you get started.

2. Do I need a buy-to-let mortgage to rent out a property?

Yes (unless you’re a cash buyer and don’t need a mortgage). It’s a special type of mortgage based on the fact that you will not be the permanent resident and so is assessed differently to a normal mortgage. Unlike a residential mortgage, where how much you can borrow is based on your own income and expenditure, a buy-to-let mortgage is assessed on how much rent the property will generate.

3. Is there a difference between a buy-to-let mortgage and a standard mortgage?

A buy-to-let mortgage differs from a residential mortgage in that it is assessed on the property’s profitability, i.e. how much rent it can generate against the cost of the mortgage.  However, many buy-to-let lenders will require you to have a minimum salary.

Once approved, your buy-to-let mortgage enables you to rent out the property to tenants. You cannot do this with a residential mortgage.

4. Other notable differences include:

Interest rates

Interest rates on buy-to-let mortgages are usually higher than residential mortgage rates.

Deposit and property value

The minimum deposit is usually 20% of the property value on a buy-to-let mortgage.

Arrangement fees

Arrangement fees on a buy-to-let mortgage may be higher than on a conventional mortgage. It is also common for conveyancing costs to be slightly higher for a rental property

3. What is the process for getting a mortgage?

If you’re moving home, you may be interested in keeping your existing home and changing it into a property to let, sometimes known to as let-to-buy.

If you decide to move out of the property you’re currently living in and intend to rent it out, you’ll need a buy-to-let mortgage. You could ask your current lender for their agreement to let the property out, which might involve changing your mortgage to a buy-to-let mortgage. Alternatively, you can remortgage to a new lender on a buy-to-let deal.  Failure to inform your mortgage lender that you are renting your property out could mean a serious breach of contract.

You also need to ensure certain things are in place, such as landlords insurance and tenancy agreements. A good letting agent will help you with this.

Anstee & Co is independent with access to the whole of market and is experienced in finding the most suitable mortgage. With buy-to-let and let-to-buy, it’s essential to get the right advice. Please call one of our expert advisers and we will be happy to design a solution for you.

Do be aware that it is considered “mortgage fraud” to either let a property while only paying for a residential mortgage or to move into a property that you have told the lender you are renting out. Make sure you are open and honest with your broker and lender about your plans

Can we help?

Are you thinking of buying your first buy-to-let property or adding to your current portfolio? Do you already have a buy to let mortgage and are looking to switch to a better deal? Contact our expert advisers today.

For mortgages we can be paid by commission, a fee or a combination of both. Our typical fee is £395. However, we will discuss your payment options with you and confirm the actual amount payable before we begin to provide our services.

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01536 483733

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