Buy to Let Mortgages in Lincoln
Independent Mortgage Advice

Buy to Let Mortgages

A buy to let mortgage (sometimes referred to as an investment mortgage) is designed for borrowers who want to let their property out to a third party (i.e. tenants).

More and more people are investing in property as a long-term opportunity to make profitable returns, and as a way of securing finance for their retirement.

However, becoming a private landlord should not be seen as an easy way of making money as it can be riskier and more complicated than some other forms of investment. It can also be time consuming and there is no guarantee that house prices will rise.

That said, having a second (or subsequent) property to let to tenants could reap considerable financial rewards over time.

Your buy to let mortgage options

There are now hundreds of competitive mortgage schemes available that are specifically aimed at the buy to let market, ranging from special offer buy to let mortgage deals to fixed and variable rate options.

It’s now also recognised that some landlords have become so almost by accident, giving rise to a ‘Consumer Buy To Let’ category – perhaps having inherited a property and even a tenant.

Assessment

Mortgage lenders will often assess buy to let mortgages on the earning potential of the property (i.e. the rental income) as well as your earned income and there are three main differences in buy to let mortgages:

Rental Income

Lenders will consider the projected or actual rental income as part of their lending decision, as well as your earned income.

Interest Rates

Dedicated buy to let schemes will generally attract a slightly higher interest rate and higher fees compared to residential mortgages.


Larger Deposit

Lenders generally require 20% or 25% of the property’s value as a deposit.

Income or capital growth

When buying a property to let, you will also need to decide whether your primary objective is income or capital growth. In other words, are you looking to make a profit each month or are you looking to make a profit through increased equity?

This decision may affect the type of property you purchase, the location and the structure of the mortgage itself.

Costs

When you buy a property to let, you should also be mindful of the following additional costs:

Professional fees

Most letting agents will deduct around 10% of the rental income for managing your let property. This is in addition to the cost of finding and vetting a suitable tenant.

Property Insurance

You will need to insure your let property. Your mortgage lender is likely to insist upon buildings insurance as a minimum level of cover. It may well be prudent to have liability cover too.

Maintenance

You will need to maintain your let property and ensure that your gas and electrical appliances comply with current legislation.

You do need to be aware that there is no guarantee you will make money from owning a property. Whilst over a period of time property, prices generally rise, there are occasional ‘slumps’ in the market and having to sell at a particularly low point in the market could result in losses.

Finally, you also need to remember that any mortgage payments will still need to be met even if you have periods when the property is empty.

Ready to take a step towards your buy to let property?
Here’s how easy it is working with us:

Fact Find

1. Fact Find

Let’s meet and establish why you’re looking at a Buy To Let – Income, Capital Growth or both
Research

2. Research

Let us find out the likely cost of your venture, secure you an Agreement in Principle and guide you on target prices
Independant

3. Property Hunt

Find the right property to support your aim. Anticipated rental income is key.
Offer

4. Offer

Make an offer, knowing you already have a mortgage agreed in principle.
Paperwork

5. Paperwork

Allow us to complete the paperwork for you.
Contact Us

Speak with a buy to let mortgage expert on 01522 540777