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Buy to Let Mortgages

The buy to let market has come a long way since its inception in 1996.

What is a buy to let mortgage: This is a mortgage designed for people who wish to purchase a property to rent out to others. The ability to repay this type of mortgage is often based on the projected rental income from the property as opposed to the personal income of the borrowers.

Renting property and becoming a private landlord should not be seen as an easy way of making money. As with all things there are risks involved and with no experience or the right guidance things can become complicated. However with the number of school leavers heading to university on the rise, immigration continuing at a steady rate and affordability issues preventing many from buying their own homes, demand for rental property remains keen and becoming a private landlord can be financially rewarding.

There are some differences between buy to let mortgages and conventional residential mortgages.

  • The decision of whether your mortgage is accepted from an affordability point of view is mainly based on the rental income the property can generate. Personal income is not normally considered, however recently lenders are requesting to know what your personal income is to ensure if the property is not rented the mortgage payment can be sustained.
  • Buy to let mortgages have slightly higher interest rates.
  • Larger Deposit - typically a minimum of 20% or 25% of the property's value is required as a deposit.

When becoming a private landlord your primary objectives are income and capital growth. In other words, you are looking to make a profit from your rental income every month and also hope for property prices to rise. The location, condition and demand is crucial in your decision when purchasing a property.

We strongly recommend you speak and discuss your requirements with one of our Buy To Let Specialists for advice and guidance.

Call LFS on 020 8427 5057 or request a call back

 

 

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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

* The Financial Conduct Authority does not regulate some forms of buy to let, secured loans, commercial finance, bridging finance, overseas or offshore mortgages and will writing.
Your initial mortgage consultation is obligation free. We charge an administration fee for processing each mortgage contract and our fees only apply when you decide to proceed with an application. For standard residential mortgage contracts the typical fee of up to 1% of the mortgage loan applies of which £500 is payable on application with the balance payable on offer . For buy-to-let mortgages a typical fee of up to 1% of the mortgage loan applies of which £500 is payable on application with the balance payable on offer. For offshore and commercial mortgages a typical fee of 1% of the mortgage loan applies of which £1000 is payable on application with the balance payable on offer. For impaired credit lending the typical fee is 1% of the mortgage loan applies of which £500 is payable on application with the balance payable on offer. The overall cost for comparison is 5.5% APR. The actual rate will depend on your circumstances. Ask for a personalised illustration.

The adivce and/or guidance contained within this website is subject to UK regulatory regime and therefore is restricted to consumers based in the UK.