Buy To Let Mortgage For First Time Landlords
Why use Fair Mortgages
Fair Mortgages can provide a first class service, if you are looking for a buy to let mortgage broker service.
Special features of what our broker service offers include:
- Rental Income Requirements - What lenders now require on rental income - we can help you secure your first buy to let mortgage and get you through the lender criteria maze
- Whole of Market Buy to Let Broker - We deal with most UK buy to let lenders that are prepared to provide mortgages to fist time landlords including private banks, specialist lenders and wealth managers
- Buy to Let Rates – Access to leading buy to let market rates
- Exclusives - Access to exclusive buy to let mortgage deals not available on the high street
- Our BTL Expertise – Expert help for first time landlords
- Credit Issues? - We have lenders who will take into account previous defaults and missed payments if applicable
To investigate your buy to let mortgage options, call our specialist team on 0117 313 7780 or fill in our call back form.
If you want a buy to let mortgage and become a landlord, but you do not know where to start, it is advisable to contact a specialist broker to get the best financial solution for your set of circumstances.
It is important to note that there have been a lot of changes that affect buy to let landlords and if you are looking to become a first time landlord, you should familiarise yourself with the recent changes.
2017 Tax Rules
In order for your buy to let to be successful, you need to be aware of the changes to the tax relief rules governing buy to let landlords.
From 2017, landlords can no longer deduct their entire financial expenses that arise from their buy to let properties when calculating their profits on their end of year self-assessment. This means that landlords’ tax bills will likely increase significantly.
However, the tax rules do not affect limited companies and it remains that only their profits are subject to tax. This has led to an increase in landlords looking to set up their own limited company, in an attempt to circumvent the effect of the tax rules.
Any landlord who intends to set up their own limited company for their buy to let properties should consider the associated costs before doing so.
Prudential Regulation Authority’s Regulations
First time landlords may find it more difficult to secure a buy to let mortgage through a traditional lender, due to the changes introduced in 2017.
The Bank of England’s Prudential Regulatory Authority (PRA) implemented changes to the regulations that govern the buy to let mortgage market, which altered the way traditional lenders consider buy to let applications.
Buy to Let Mortgage Under New Regulations
Under the new regulations, traditional lenders will consider the following when assessing a first time landlord:
Deposit - Unlike residential mortgages, which can be secured with a deposit as low as 5%, buy to let mortgages usually require a deposit of 25% of the value of the property. It is possible to get a buy to let mortgage with a lower deposit, but this is usually through a private lender.
Rental Coverage Ratio - Due to the RPA changes, traditional lenders will typically require landlords to have a rental coverage ratio of at least 145% for standard buy to let properties and up to 170% for houses in multiple occupation (HMO). Traditional lenders will only accept rental coverage ratios based on a professional valuation from a surveyor.
Income Stress Test - In order to comply with the PRA regulations, traditional lenders will implement a strict income stress test. For first time landlords to satisfy the traditional lenders’ income stress test, they have to be able to show that they can afford mortgage repayments in the event that the interest rate increases to 5.5%.
If you are a first time landlord and you need a buy to let mortgage, you may benefit from the assistance of a professional broker.
Fair Mortgages can guide you through the complex process of the buy to let mortgage market and can help you avoid the stringent criteria of traditional lenders to find you the best financial solution for your set of circumstances. Fair Mortgages can find the ideal buy to let mortgage for you through professional links with traditional lenders, private banks, specialist lenders and wealth managers.
Fair Mortgages may be able to help you. Fill in the online contact form on this website to request a call back from one of our advisers and receive a free initial consultation. Alternatively, you can call us directly on 0117 313 7780.