Buy To Let Mortgage Advice
A Buy to Let mortgage is arranged specifically for the purchase or remortgage of a property that will be let out or tenanted. It can be organised on a repayment or interest-only basis. The interest rates and fees that are offered on BTL mortgages are, on average marginally higher than those applied for on an owner-occupied mortgage, mainly due to the perception amongst banks and other lending institutions that BTL mortgages represent a greater risk than residential owner-occupier mortgages.
Regulation has tightened in the Buy to Let sector significantly in recent years, and as such there are far more specialist lenders in the market that are only accessible through mortgage intermediaries. Additionally, many lenders no longer provide options to ‘portfolio landlords’ (typically classed as those with 4 or more mortgaged Buy To Let properties) as regulation has made this a much more specialist area. The mortgage lender will likely assess the portfolio rental yield as a whole as well as the subject property.
It is also increasingly common for property to be purchased in the name of a limited company for which not all lenders are able to accomodate but at Cherry Tree Financial we are aware of all the options available for this scenario.
By using us as a mortgage adviser, we will be able to search the market, find out which lender will fit your needs and complete the paperwork for you. Moving forwards we will also be able to manage your portfolio, whether one property or more to ensure that you avoid paying higher interest than necessary throughout the life of the mortgage borrowing.
To qualify you will need to satisfy lenders that the property you are buying will achieve a specific rental income, so it is important to understand the market rent for the property you are intending to purchase / remortgage. On occasion it is possible that personal income can be used to cover a rental shortfall. You will usually need to have a larger deposit compared to residential mortgages. Ordinarily the highest Loan To Value on a Buy to Let is 75%, as such you would require a 25% deposit. Some lenders do have products requiring lower deposits, please contact us for details.
Having obtained a buy to let property, as for all property rental, the benefits can include a stable income from rental receipts, as well as an accumulation of wealth if house prices increase over time.
Types of Buy To Let Mortgages We Arrange:
- First Time Landlord
- Experienced investor
- New build purchase
- Portfolio Remortgages
- Equity release for deposits for building on your portfolio
- Holiday / Corporate Lets
- Limited Company purchases
- Student Lets / HMO (Houses with Multiple Occupation)
- Think carefully before securing debts against your home. Your home may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. Please note that some mortgages such as BTLs are not regulated by the FCA.
Buy to Let/Landlords Insurance
If you decided to buy a property and then rented it out to paying tenants, you have become a landlord. A home buildings and contents insurance policy will not offer the level of cover you need for a house that is rented out. A landlord insurance policy can be in most cases tailored especially for you and your property or properties so you have the right cover you need.
Landlord Insurance typically covers you for buildings cover, employer’s liability and legal expenses as well as tenant’s default. With the right amount of cover you can secure your properties to make sure you are covered if anything were to go wrong.
Features like accidental damage, legal cover, loss of rent and home emergency cover are just some of the standard features or optional extras and upgrades available with landlord’s insurance. Typically your landlord’s insurance policy will cover against damage to your property by flooding, fire, subsidence, smoke, burst pipes. Unoccupied cover can also be included on the policy, so if your property is empty you could still be covered under your insurance.