Buy-to-let & Commercial
If you are looking to buy a residential property to rent out as an investment, you will need a buy-to-let mortgage. Such mortgages are routinely provided by the same Banks and Building Societies that provide residential mortgages, though for more complex proposals there are a number of specialist lenders that operate in this sector.
How can we help?
The underwriting requirements differ from residential mortgages as aside from assessing a borrower’s personal circumstances the lender will also look at the income the property will generate as an investment.
At Jordan Lynch we have a dedicated team of buy-to-let mortgage advisors.
Whether you're a first-time landlord, an 'accidental' landlord, or an experienced investor we’ll consider all your requirements and arrange the most cost-effective mortgage available.
We’ve answered the questions you might have
How Much Can I Borrow?
BTL mortgages are typically available up to 80% LTV, however, aside from valuing the property the lender will also ask the surveyor to assess the rental value, which will determine how much they will lend with the key benchmark being that they will only lend 125% of the of the monthly interest payment at an assumed interest rate of 5%.
The assumed (stressed) interest rate of 5% can often result in the lender offering a small loan relative to the property value, particularly in areas such as London where there are low rental yields, however, for higher earners some lenders will waive this requirement and still provide a mortgage at the often desired 75% LTV.
What Costs Are Involved?
As with buying a residential property, you will have to pay fees to the lender, surveyor, solicitor and mortgage broker.
Stamp Duty Land Tax is also charged at 3% above the standard rates when you buy a residential investment property. Find out how much you will have to pay with our buy-to-let stamp duty calculator.
Jordan Lynch will outline all the costs including interest and fees that apply to the mortgage for your approval prior to going ahead with the application.
I want to rent out my own home to tenants. Do I need a buy to let mortgage?
This depends on the terms and conditions of your existing mortgage.
It should be a residential mortgage for owner occupation, however, some lenders will provide ‘consent to let’ for a short period of time, though a buy-to-let mortgage is likely to be the most suitable long-term option.
Do your homework
Before buying a new rental property, you should treat this as you would any important business decision and do some research. Think carefully about where to buy, who you want to rent to and what condition you want them to keep the property in. Consider the area you choose to buy in and research the local rental market to ensure there is a strong demand for your type of property and that the rent will cover your mortgage.
If you are planning to buy a property that needs a lot of improvements, make sure you can afford to pay the mortgage without a rental income for the period of time it will take to complete the work.
Other things to consider
Think about how your situation may change in the future. Perhaps you plan to move house within the next few years or will want to remortgage again. Look at the portability, flexibility and early repayment fees involved with your new mortgage to ensure you’re happy with the conditions.
Carefully consider the costs mentioned above and ensure you can afford them. If you are remortgaging to save money, it is advisable to factor in all the costs involved before deciding if it’s worth it. Jordan Lynch will provide clear details of all fees and repayments to help you with this decision.