Buy to Let
Considering a buy to let mortgage?
To discuss the best buy-to-let mortgage options for you, simply click the button below. Clements Financial can help you with your buy-to-let mortgage needs!
WHAT IS A BUY TO LET MORTGAGE?
Buy-to-let (BTL) mortgages are for landlords who want to buy property to rent it out. You will have the option to take out a repayment mortgage or an interest only mortgage.
When measuring affordability for buy-to-let mortgages, lenders stress test applications against mortgage rates rising to guard against unexpected rises in costs for landlords. This is done by using the suggested rental income.
This is calculated by multiplying the loan amount by the stress rate, then again by the taxpayer rate – to give you the rental needed. For example:
Basic rate taxpayer – £150,000 (Loan amount) x 5.5% (Stress rate) x 125% (Tax rate) = Rent Required £860pcm
Please note that some forms of BTL mortgages are not regulated by the Financial Conduct Authority (FCA).
WHO IS IT FOR?
To get a BTL property, you must be able to provide a minimum 20% deposit for your new purchase. You must also have an income that can support your additional mortgage if a tenant is unable to pay.
There are various clients of BTL property mortgages, these include:
- Non Portfolio Landlord — a client who has 3 or less properties and classified as an ‘amateur landlord’.
- Portfolio Landlord — a client who has 4 or more properties and classified as an ‘experienced landlord’.
- SPV Limited Company (Special Purchase Vehicles) — a company set up solely for the buying, selling and letting of their own residential property.
INITIAL APPOINTMENT
When applying for a mortgage, the initial appointment is referred to as a ‘fact find’. This enables the advisor to work out what options are available to you.
We’ll ask about your income, expenditure and lifestyle, as well as any other information that could impact your financial situation.
The advice we give is based on the information you provide. It’s essential that you’re open and honest about your current situation.
At this stage we’ll also discuss your solicitor options.
Remember you require the following documents for this appointment
- 3 months payslips if employed/ 2 years SA302’s and tax year overviews if self-employed/ 2 years full accounts if a limited company
- 3 months’ bank statements for all current accounts you hold
- Photo Verification
- Proof of address
- Proof of deposit
- Property log detailing all existing BTL properties
Want to discuss Buy to let mortgages?
If you’d like to discuss your best buy to let mortgage options, please get in touch.
