Investing in property
If you’re thinking about buying a home to rent out, earn an income and raise potential capital over time, then like most people you will probably require a buy to let mortgage to complete the purchase.
Whether you are a first time landlord or adding another to your portfolio we can offer advice so you know where to start and we can help navigate the different products available for purchasing a BTL so you can be sure you are getting a buy to let mortgage that is right for you.
Products for all landlords
There are many new innovative products that have come to the BTL market over past few years which means sourcing finance for a buy to let can be done without going down the route of a “traditional” mortgage.
No matter your experience, if you are high net worth individual or first time landlord, we can help arrange your buy to let properties to be setup efficiently and cost effectively as possible.
How does a BTL mortgage differ from a residential mortgage
Both types of mortgage are quite similar but with some key differences:
– Assessed on the rental income rather than your own personal income.
– Minimum deposits usually start at 25% or a 75% LTV mortgage although we have to lenders who offer 80/85% mortgages.
– Most Buy to Let mortgages are interest only, meaning the amount you borrow (the capital) will still need to be repaid at the end of the term.
– Interest rates tend to be a little higher, for the added risk, but because of the debt service coverage ratio there will be room to earn an income from the rent.
See other BTL FAQ’s answered.
Things to consider
– Can I rent out my own home? Yes but this let to buy instead of a buy to let, find out more.
– How does it affect my tax position? Rental income and the profit you take will be taxed as a personal income depending on your tax bracket.
– Should I use a management company? This depends how hands on you want to be and whether you are happy to pay someone else to look after the property.
– Do I pay stamp duty when purchasing a BTL? Yes you will pay stamp duty depending on the property value and incur an additional 3% surcharge, full stamp duty bands here.
Most buy to let’s are not regulated by The Financial Conduct Authority, please refer to your advisor for full details.