5 Things You Need to Know About Buy to Let

A Buy to Let (BTL) mortgage is a product for landlords who want to purchase or remortgage a property to let out. In this newsletter, we provide answers to some of the most frequently asked questions we receive from clients interested in Buy to Let mortgages.

Can I raise a deposit by remortgaging an existing property? Put simply yes. If your existing property benefits from positive equity there may be a number of options available to you from a simple remortgage to second charge loans. It is best to speak with our experienced buy to let mortgage brokers who will be able to discuss the options available to you.

Do I need a minimum income to get a buy to let mortgage?
Many lenders have no minimum income requirements however applicants must still produce proof of an income. Although we do have a few lenders that require no employed income whatsoever, of the lenders who require a minimum income, this is usually no more than £25,000. Some lenders require minimum income to be earned income from employment or a profession but not from property investments. 

What proof of income is required? In most cases, a lender will require proof of income, this is likely to be in the form of payslips if you are employed and if you are self-employed you will need to provide your latest SA302 (self-assessment tax calculation form) there are some circumstances where lenders may not need to see proof of income particularly if you are an experienced landlord and have additional buy to let investments.

What if the passing rent is less than the market rent?
Many landlords have not increased rents on their properties since before the pandemic and some have even reduced rents for long standing tenants that they have wanted to help after they were furloughed. The problem with this benevolence is that when they come to remortgaging the lower rents affect the rental calculations leading to difficulties in obtaining the existing loan or making it impossible to raise capital. The good news is that we now have access to a couple of lenders that will use the market rent rather than the passing rent when calculating the maximum loan available.

Can an Expat obtain a Buy to Let mortgage in the UK? Yes, we can arrange buy to let mortgages in the UK for UK citizens living abroad (ex-pats) however the choice of lender is narrower and the criteria is likely to be tighter. Most lenders will not lend to an ex-pat on their return to the UK for at least 2 -3 years however we have access to a few lenders that will lend within the first year. 

If you are thinking of purchasing a buy-to-let investment or would like to discuss refinancing, please speak to a member of the team or our senior broker, Danny O’Keeffe on 0208 364 3444 alternatively schedule a call back by clicking on the button below.