Buy to Let Mortgages for Over 75s
Buy to Let Mortgages for Over 75s
Traditionally, obtaining a buy to let mortgage on your property after you enter your 70s is a difficult and time consuming process. Over 75 year olds tend to face a limited selection of buy to let mortgage deals, due to lenders implementing unfair upper age limits on their financial products. It is therefore not uncommon to have your buy to let mortgage application rejected if you are over the age of 70, or even 65!
So if you’re over the age of 75 and are looking for the right buy to let mortgage deal on your ideal property, you might be wondering what options are actually available to you.
Whilst it is true that getting a mortgage past the age of 75 has its difficulties, there are still a good number of lenders who are willing to offer older investors buy to let mortgage deals.
In more recent times, lenders have started to realise that people are now living longer, and that elder investors can still be a worthwhile, profitable investment for them. This means good news for investors over the age of 75, as now finding the ideal buy to let mortgage on your property has been made considerably easier.
If you are looking for a buy to let mortgage over the age of 75, you should familiarise yourself with the recent changes to the buy to let regulations and tax rules.
Changes to the Buy to Let Tax Rules
From 2017, landlords can no longer deduct their entire buy to let property financial expenses to calculate their profits in a self-assessment at the end of the financial year. This means that landlords' tax bills will increase.
It should be noted that these rules do not affect limited companies. As a result, there has been an increase in landlords looking to set up their own limited company to avoid the new tax rules. This may be a viable option, but there are some associated costs that should be considered before setting up a limited company.
Changes to Buy to Let Regulations
The changes in the buy to let mortgage regulations have affected the way lenders consider buy to let mortgage applications.
In previous years, landlords only required to have a rental coverage ratio of 125%. To successful secure a buy to let mortgage, landlords now need a rental coverage ratio of 145% for a standard buy to let and 170% for a house in multiple occupation buy to let that is based on a professional surveyor's valuation.
The increase in rental coverage is to protect landlords from falling into arrears with mortgage payments when their property is without tenants for a period of time.
From 2017, lenders will apply a stricter income stress test than before. Lenders will now require landlords to be able to afford mortgage payments in the event that interest rates increase to 5.5%.
Finally, during the application process lenders will take an in-depth review of the landlord's property portfolio. This is to review every one of the landlord's property to ensure they are all profitable. It is important to note that landlords can no longer spread their equity across their portfolio. Therefore, if a landlord has one or more properties that are profitable then a lender will refuse to approve the buy to let mortgage.
How you can find your perfect buy to let mortgage deal
1. Shop around – Similar to any other financial product, it is important to shop around and compare all of the deals available to you. We understand that the process of finding and sifting through a number of different mortgage packages can often be overwhelming, here are some of the following factors you should consider when evaluating your options.
• Mortgage requirements and your eligibility
• Fixed rate or variable rate
• Additional fees
• Interest rate
2. Speak to a Mortgage Broker - Once you have found all of the options available to you as an over 75 year old, it is still often difficult to pick out which deal is best for your personal circumstances. That’s why we recommend contacting a mortgage broker who can analyse your situation, to give you assistance in making the best decisions for your future and helping you achieve your buy to let mortgage goals. A mortgage broker will be able to compare the best options and even offer you exclusive mortgage deals that are not available on the high street.
If you would like the assistance of an independent mortgage adviser, you can contact us directly on 0117 313 7780 and receive a free initial consultation. Alternatively, fill in our online contact form to request a call back from our buy to let mortgage advisory team.
In addition to offering advice and exclusive deals to over 75 year olds, we also offer:
Quick turnaround – You can speak to us today if you need to move quickly.
Friendly telephone service - From our expert mortgage advisers.
Whole of market service – We work with most UK lenders.
Access to exclusive deals - We can find leading buy to let mortgage rates