At Advantage, we have years of experience with Buy to Let mortgages.
We understand that everyone’s circumstances are different when it comes to investing in a property, and we have arranged mortgages for the nervous first time investor, to the portfolio LTD company BTL professional.
Unlike a residential mortgage, BTL loans are based on the property’s profitability, i.e. how much rent it will generate offset against the cost of the loan. Some personal income will be taken into account but the viability of the investment is often the deciding factor.
Some lenders require your earned income to be at least £25,000. However, there are specialist lenders who do not have an income requirement, making it easier for someone on a low income to buy a property for investment, we can help you navigate the market.
Mortgage Eligibility Criteria can also differ from a standard residential mortgage. Generally, the following will impact the lender options:
Some BTL mortgage lenders refuse to deal with borrowers aged over 75 or under 21.
Whether you own property already
Some lenders require you to already be a homeowner for a set amount of time. This is known as the owner occupier clause.
Most lenders prefer borrowers with a standard property type, which basically means anything made from bricks and mortar. Buildings with non-standard features such as thatched roofs and timber frames, as well as listed buildings, are considered non-standard and therefore may require a specialist lender. If you are considering buying a flat, there are further considerations such as the number of flats in a block, the number of floors in the building etc.
Buy-to-let mortgages typically come with higher deposit requirements to standard residential home loans. Some lenders will accept a deposit as low as 15% of the purchase price, however the options will be limited. In general, if you have a 25% deposit, you should have access to a wider variety of lenders and products.
Tenant Type & Tenancy Agreement
All mortgage lenders will need to know who you are intending to let the property to, and for how long their tenancy agreement will tie them in for. Generally speaking, the majority of lenders like ‘low risk’ tenants (Families, Professionals etc). If you are thinking of renting to Students, Department for Social Security or putting in place a long term agreement, you will need a specialist mortgage lender.