A Buy to Let mortgage is essentially an investment made by the borrower where the objective is to rent the property rather than reside in it as their primary home. Buy to Let mortgages are generally more expensive than a standard residential mortgage with lenders expecting higher deposit amounts to be put down by the borrower and the interest rates can be higher too.
In most cases, a Buy To Let mortgage will be taken out on an Interest the only basis, rather than a Capital repayment basis. On an Interest, only the borrower would repay only the interest component to the lender, while the capital would still be outstanding at the end of the mortgage term. To ensure that the customer will be able to repay the capital at the end of the term, the lender may require details of the proposed repayment vehicle.
The eligibility of a Buy to Let mortgage is assessed by lenders differently from the way they would assess a Residential Mortgage. For a Mortgage Brokers for First Time Buyers, the lender will expect the rental income on the said property to be higher than the expected repayment on the mortgage.
The quickest way to discover the maximum you can comfortably borrow is by speaking to an experienced residential mortgage broker, such as ourselves, to check the mortgage deals available, that way you can be sure you get the right deal.
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Buying a home, particularly if it’s your first home, can be a daunting prospect.
There are so many steps to take and it’s easy to get confused.
The process to buy a property in the UK is quite complex and time-consuming; just knowing which step to take first and when, can be a lottery.
To ensure your property purchase runs as smoothly as possible and that you have ‘all your ducks in a row’ to buy a property in the UK, we’ve put together our guidelines to help you.
