Buy to Let Mortgages for Older People
Am I too old for a buy to let mortgage?
Traditionally, it’s been hard for elderly investors to secure buy to let mortgages from lenders, with older investors being viewed as too risky and unprofitable.
However, with recognition to people now living longer; banks and building societies have began to realise that lending to older people can still be worthwhile, and have started scrapping their unfair age limits on buy to let mortgages. This spells good news for elderly investors, meaning finding a buy to let mortgage doesn’t have to be the headache that it was five to ten years ago!
There are now plenty of opportunities for elderly investors to get a great deal on their buy to let mortgages.
Though if you are looking for a buy to let mortgage, you should familiarise yourself with the changes to the buy to let mortgage market.
Changes to tax rules
Landlords can no longer deduct all of the financial costs that derive from their property to calculate their buy to let property profits. As a result, many buy to let owners will see their tax bill increase heavily next year.
The changes in the mortgage interest tax relief do not affect limited companies. Limited companies do not have to pay tax on their financial costs, as only their profits are taxed.
In light of the new tax rules, private landlords may choose to set up limited companies to avoid the new tax rules. However, there are some associated costs that should be considered before setting up a limited company.
Changes to buy to let mortgage market
From 2017, lenders will require applicants to have a rental coverage ratio of 145% for buy to let properties and 170% for houses in multiple occupation buy to lets. The additional 45% to 70% acts as a 'safety net' to account for any period of time that the property is without tenants.
It is important to note that landlords cannot simply state how much they intend to charge per month, lenders will require a professional surveyor valuation to be the basis of the rental coverage ratio.
As a result of the 2017 changes, lenders will apply a stricter income stress test. To satisfy the test, landlords will have to illustrate that they can afford mortgage payments in the event that interest rates increase to 5.5%.
Also, landlords should be aware that they can no longer spread equity across their portfolio. Lenders will review the application in line with the applicant's entire portfolio. This means that lenders will no longer approve mortgages to landlords, if they have one or more properties that are not profitable.
Where should I start my search?
Like any financial product, it is important to shop around and review all of the options available to you. So when starting the search for your perfect buy to let mortgage deal, you should focus on the following factors.
• The rate of interest charged by the lender
• Admin fees charged by the lender
• The criteria of lenders and eligibility conditions
• Fixed rate vs. Variable rate loan
Gain advice from a mortgage Broker
Deciding to take out a buy to let mortgage is a big investment, so before you make the final decision, you should consider gaining advice from a qualified financial adviser. We recognise that conducting independent research is important when looking to find the best deal on your buy to let mortgage. However, we also understand that making sense of the whole process and choosing the deal that best suits you can be overwhelming. That’s why we provide a team of specialist advisers dedicated to helping you make the right decisions for your future and achieve your mortgage goals.
Buy To Let Mortgages For Older People
If you think you would like help from an independent mortgage adviser, you can contact us directly on: 0117 403 4474 or fill in our form to request a call back from our buy to let advisory team, who can provide you with a free initial consultation about mortgages.
Our buy to let mortgage service
Special Features of what we offer our older investors
• A friendly, personal telephone service with our expert mortgage advisors
• We have lenders who do not see age as a barrier to getting finance
• We have access to exclusive deals that are not available on the high street
• We work with most UK leaders to offer a whole of market service.
• We can provide a quick turnaround Speak to us today if you need to move quickly.