Buy To Let Mortgages
You need a buy-to-let mortgage if you intend on buying a rental property. You will usually require a larger deposit than a residential mortgage, however you’re legally required to get a Buy to let mortgage when putting the property up to let.
Renting your house on a residential mortgage could be a breach of contract with the lender. You may even need to immediately repay the loan in full.
Buy To Let Deposits
Deposits for buy-to-let mortgages are often larger you would find with other mortgages. You often need a 10% deposit for a residential mortgage, buy to let properties need at least 25%.
Of course as with residential mortgages, the higher the deposit, the better rate you’re likely to be offered.
Buy To Let Rates
Buy to let mortgage rates are dependent on a number of factors, but are largely determined by the Loan-to-value (LTV) percentage. The LTV percentage determines how much of the property purchase price is covered by a mortgage.
Assuming you buy a house for £300,000 and have a deposit of £75,000, thats a 25% deposit and a 75% LTV.
Who Can Get a Buy To Let Mortgage?
Many people can get a buy to let mortgage. Some lenders used to stipulate that the borrower needed to own a residential property beforehand but this is less commonplace. A good credit rating will help your chances of being accepted.
Buy to let mortgages can be considered higher risk, as the repayments may be dependent on the house being occupied and tenants making repayments. As the borrower, the mortgage is your responsibility to ensure timely repayments. Failure to do so can result in your property being repossessed.
In some instances, there is a limit on the number of buy to let mortgages one person can have, which is often 3. There can also be a maximum lend amount over all mortgages, but this is often in excess of £2 million.
Need More Information?
If you need more information on buy to let mortgages, please don’t hesitate to speak with one of our advisors. As an independent mortgage broker, we have access to a large panel of lenders and can advise on the most suitable product for you.