You may have to pay an early repayment charge to your existing lender if you remortgage
Buy-to-Let Mortgages
A buy-to-let mortgage is designed for people who want to purchase property as an investment and rent it out. These mortgages differ slightly from residential ones, and there are specific criteria you must meet.
Application Process:
Evaluate Your Finances: Determine the size of the deposit and how much you can borrow based on rental income.
Get a Mortgage Agreement in Principle: A lender will assess your financial situation and potential rental income to decide how much they can offer.
Submit Your Application: You’ll provide proof of income, details of the property, and projected rental income to your lender.
Valuation & Affordability Assessment: The lender will value the property and assess its rental potential.
Receive Your Mortgage Offer: Once approved, you’ll get a mortgage offer based on the property’s rental yield and your financial situation.
Factors Lenders Consider:
Deposit: Buy-to-let mortgages usually require a larger deposit—typically 25% or more of the property’s value.
Rental Income: Lenders usually require that the expected rental income is 125-145% of the mortgage repayments.
Affordability: Your personal income will also be considered, especially if there are gaps in rental occupancy.
Experience as a Landlord: Some lenders prefer borrowers with previous experience, though it’s not always essential.
Top Tips
Research the Rental Market: Make sure the property will generate enough rental income to cover your mortgage and other expenses.
Plan for Extra Costs: Factor in maintenance, property management, and possible void periods when calculating your returns.
Consult a Tax Advisor: Buy-to-let properties come with tax implications, so it’s essential to understand the financial impact.
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If you’re getting on the property ladder, a Liverpool Mortgages can help you navigate the house buying process.
