Buy to Let It may seem daunting investing your wealth in a second property, however we are here to guide you through the process. We can provide guidance on the advantages and pitfalls of investing in property and explain the most cost effective ways of raising the finance.

Once you have decided whether your primary objective is for Income or Capital growth, you need to make sure that you have done your research and planning, understand the possible issues that may crop up and ensure you have some spare funds to cover any unforeseen delays or problems.

What else do I need to know

There are some important differences between mortgaging a buy to let property and your main home:

Rent Potential: You will need to find out how much monthly rent the property will command. You could ask a letting agent for this information. This is important as lenders take this figure into their calculations. Most will require the rental income to exceed monthly mortgage payment by a specific percentage typically 125%.
Interest Rates: Buy to let mortgages 'usually' have slightly higher interest rates and sometimes a significantly higher arrangement fee
Deposit: Typically a minimum deposit of 25% is needed. It is possible to obtain a loan to value of up to 75% however you may not get the best interest rate at this level.
Your Income: Some Buy to Let lenders require you to have a job. Some require you to have a minimum income to qualify. There are lenders who will lend on a Buy to Let basis to a first time buyer.

The benefits of using 'Mortgagehunters'

So there are a few more considerations to take into account, you could spend a lot of time researching the lenders and still miss the best deal.

By asking you the right questions we can quickly target the lender most likely to favour your individual circumstances.

We have helped numerous first time Landlords many of whom have since added other properties to their portfolio.

Mortgagehunters's advisors have a wealth of experience to take the stress out of buying an investment property.

Availability of Finance

Before committing to purchase a property, (especially if you are going to auction) you will need to have sufficient finance available either out of your own savings or with the help of a mortgage lender. Given the number of lenders available and the different scheme types you will find it beneficial to seek advice from a qualified mortgage advisor.

Remember that the lending criteria for buy-to-let mortgages are often more restrictive than residential mortgages. While it is possible to secure a residential mortgage for up to 90% of the purchase price of your home, the maximum for buy-to-let mortgages is 75% of the purchase price.

In all your financial planning, remember that your property may be repossessed if you do not keep up repayments on your mortgage.

Location of property

Unless you are purchasing a property close to where you live ensure that you understand the issues that distance will create in managing the property.

Rental Income

When you calculate your finances, remember that rents can fall as well as rise, so don't always expect to receive a full 12 months rental each year. You can err on the side of caution and perhaps only calculate letting out for 10 months in every 12.

Costs

Ensure you have taken all costs into account, Management fees, maintenance costs, insurance etc.

Letting agents

You may want to consider engaging a letting agent who will perform some of the associated and time-consuming tasks of buy-to-let such as:

legal paperwork
finding tenants
repairs and tenant issues

Letting agents charge significant sums in yearly management fees to perform this work usually expressed as a percentage of the rent. It can be usual to pay between 10% to 15%.

Insurance

Many insurance providers offer special buy-to-let policies which offer a more comprehensive policy. It is important you take a specialist policy as most residential policies will not pay out if problems arise when the property is tenanted.

Questions

How will I benefit from using 'Mortgagehunters'?

As mortgage brokers we offer a classic time versus money trade-off.

Mortgagehunters charges a fee to help you arrange your Buy-to-let or commercial mortgage. This fee is usually up to 1% of the mortgage amount, plus an administration fee of £100. Our service includes:

Find the most appropriate mortgage for your circumstances.
Save you the time and the inconvenience of discussing your specific financing needs with multiple lenders.
Preparing your documentation to submit to lenders.
Process your mortgage through to successful completion, liaising with the other parties such as Lender, Solicitors and any Estate Agent.
Keep you informed of the progress on a regular basis.

Buy to let mortgage are not regulated by the Financial Services Authority.

Ring us now for assistance

Your home may be repossessed if you do not keep up repayments on your mortgage.

Our fees are usually up to 1% of the loan amount depending on your circumstances. Typically this will be £361 plus a £100 administration fee.