Buy to Let Mortgage Requirements
Buy To Let Mortgage Requirements
The buy to let mortgage you will be offered is dependent on your personal circumstances and the criteria of the lender. Each lender has a varied set of requirements that will determine whether or not you are eligible to take out a buy to let mortgage.
Although these requirements will not be the same with every lender, here is a guide on what lenders might take into consideration before offering you a mortgage.
1. A hefty deposit
It’s worth noting that you can typically only borrow up to 75% of a property’s value. A few lenders might offer 80% and the odd one might go up to 85% (although this is very rare). So if you want to take out a buy to let mortgage, you'll have to save up some cash.
2. Your homeowner status
You can expect nearly all lenders to require that you own your own home before offering you a buy to let mortgage, although this does not have to be a mortgage-free property.
3. Your credit score
It is common practice for lenders to look at any other debts you may have on personal loans, credit cards and other mortgages, even if you have an excellent credit score. If they believe that you might be struggling with other debts, they will feel less inclined to offer you a deal.
4. Your income
Lenders will like to see evidence of a consistent solid income, despite the fact that the rent will be used to pay the mortgage. An income of over £25,000 is usually enough to convince lenders.
From 2017, lenders will also require that you can afford the mortgage repayments in the event that interest rates increase to 5.5%.
5. Your experience
Although it is by no means necessary to have a proven track record in the industry before taking out a buy to let loan, it is often desirable by lenders. As a result your choice is more likely to be restricted if you are a first time landlord.
6. Your age
It is not uncommon for lenders to have upper age limits ranging from about 65 – 90 years old; this will make it trickier to secure a buy to let property the older you are. Despite this, there are still a number of buy to let opportunities available for older investors. (To find out more visit our Buy to Let Mortgages for Older People Guide).
7. An accurate estimation of the rental income
Under the 2017 regulations that govern buy to let mortgages, lenders will require a rental coverage ratio of 145% for a standard buy to let or 170% for a house in multiple occupation buy to let.
Lenders will ask you to give them an accurate estimation of the rent that the property is expected to receive. It is likely they will compare rents on similar houses in the area for confirmation.
Not only will lenders compare rents in the vicinity of your property, but they only accept estimated rental income based on professional valuation.
Our Buy to Let Mortgage Services
Why choose us?Special features of what our broker service offers include:
• We work with most UK buy to let lenders to offer you a whole market service.• We have access to leading buy to let rates.• Exclusive offers and deals – We have access to a range of mortgage deals both on and off the high street.• Buy to rent mortgage requirements - We can help you through the lender criteria maze• Buy to let expertise – Expert help whether you are a first time investor or full time landlord.To get further advice on buy to let mortgage requirements, call our specialist team or fill in our call back form.