BUY TO LET

Buy to let (B.T.L.) mortgages are for people who want to buy a property to rent out to a tenant and derive an income or increase their portfolio or both for now & later years, having seen the way in which pensions have not performed maybe.

B.T.L. still come’s with a warning, if you ( not the tenant) do not maintain your monthly mortgage payments then the lender may repossess the property.

How much can I borrow?
Most lenders will be looking for 15% deposit (some more/less). Also the criteria of some lenders will need to know that the rental income will have a buffer, of 125% - 135% of your monthly repayments, ie.25% - 35% over what comes in to what goes out.
This should allow for “voids (when the property is not let) and tenants that don’t pay
(yes it happens)

Can I get a BTL mortgage?

Some lenders solely look at the income of rents to the amount you borrowed the LTV (loan to value,) others will require that you have funds to make the payments each month should your tenants default. (not pay)
Lenders will also check out your own credit file, some may decline your application if your files show, CCJ, late or missed payments on other loans.

What else?

Apart from the deposit, legal fees, ,admin. fees, lenders fee, property insurance, some lenders require landlord public liability insurance, gas safety certificate, possibly a letting agent charge of 10% - 15% each month to collect rents & manage the property, an assured shorthold tenancy agreement, plus any repairs. Oh yes the tax man get an accountant or book keeper if this is your first venture.

What return can I expect?

Depending on the location, location, location, in an up/down property market you should see a typical landlords return vary between, 4% to 7%.

Good news is, people get married later in life, divorce 1 in 3, less social housing being built, land for building getting short, good demand for rented property. Plus you have a property that should increase in value year on year.

All of the above, Capital Alliance Financial Service Ltd can help you with, via an informal chat with no obligation.

Click & complete the initial enquiry form, and one of our Certified Advisors will contact you.

Buy to Let : is not regulated by the Financial Services Authority