A Guide to Buy-to-Let

 

 

 

 

 

Buy-to-Let Mortgages

Investing in property through buy-to-let mortgages is a popular choice for many, but it requires careful consideration and planning. At Finance Factors, we aim to make this process as easy and informative as possible for you.

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What are Buy-to-Let Mortgages?

Buy-to-let mortgages are designed for those looking to invest in property to rent out. Unlike standard residential mortgages, buy-to-let mortgages come with different criteria and interest rates due to the perceived higher risk. Here's a summary of key points to consider:

1. Stamp Duty: The rate for buy-to-let properties is higher. Use our Stamp Duty Calculator to see the impact.

2. Age Requirement: Many lenders require applicants to be at least 21 years old.

3. Credit Score: A good credit score is crucial for securing competitive interest rates.

4. Minimum Income: Some lenders require a minimum income and the ability to cover void periods.

5. Deposit: A larger deposit is often required, typically 15-25% of the property's purchase price.

6. Rental Income: The amount you can borrow is based on the expected rental income, which must cover the mortgage payments.

7. Loan to Value Ratio (LTV): Typically, you need a minimum 25% deposit.

8. Property Location: Research the area to ensure the property remains desirable and less likely to be vacant.

9. Management: Decide whether to self-manage or hire a professional letting agent, considering ever-changing landlord legislation.

Portfolio Landlords

A portfolio landlord owns four or more buy-to-let properties. Many lenders specialise in lending to these landlords with specific criteria and underwriting processes. Keeping detailed records of each property is essential for arranging new lending.

Limited Company Lending

Limited Companies, especially SPVs (Special Purpose Vehicles), are popular among landlords for potential tax benefits and more generous lender stress tests. While rates may be slightly higher, the overall benefits can be significant. Always seek professional tax advice before proceeding.

 

Make an appointment or speak to one of our advisers by filling out the form here.

 

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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR OTHER LOANS SECURED AGAINST IT.

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Finance Factors is a Trading style of Finance Factors LTD who are an Appointed Representative of Advice Solutions LTD which are Authorised and Regulated by the Financial Conduct Authority. The Financial Service Register Number is 961681.

The Financial Conduct Authority does not regulate some forms of Buy to Lets.

There may be a fee for mortgage advice. The precise amount will depend on your circumstances, but will be agreed with you before proceeding.

Finance Factors is a Limited Company. Registered Address: Finance Factors Ltd, 2 Kingsbroom Court, Kingswood, Maidstone, England, ME17 3ST, United Kingdom.  Registered in England and Wales under number 15814885.

We always aim to provide a high-quality service to our customers. However, if you encounter any problems, in the first instance please write to the registered address above, email or call Finance Factors outlining your complaint, if we are unable to resolve this, you can take your complaint to an independent Ombudsman. Our advice is covered under the Financial Ombudsman Service (www.http://www.financial-ombudsman.org.uk/consumer/complaints.htm).

The guidance and/or information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK. Some calls maybe recorded for training and monitoring purposes.