Buy To Let Mortgages For Self Employed

Our Buy to Let Mortgage Service

Special features of what we offer for self employed buy to let investors looking for finance include:

• Top rates - Access to leading market mortgage rates

• Exclusive deals - Access to rates not available on the high street

• Quick turnaround - Speak to us today if you need to move quickly

• We have lenders who will take into account previous defaults and missed payments

• Looking to raise additional finance on top of your existing mortgage or buy to let mortgage? - we have access to a range of finance solutions.

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Buy to Let Mortgages for Self Employed

Finding a buy to let mortgage can be more complex if you are self employed.  Traditionally, securing a buy to let loan has proven harder for those who are self employed, with lenders being more forensic about affordability. However, buy to let lenders have become more relaxed in their criteria for self employed buy to let mortgages with a greater range of options now available.

Changes to Buy to Let Tax Rules

For any self-employed individual looking to get a buy to let mortgage, it is important to note that landlords can no longer deduct the financial costs derived from their buy to let property when calculating their profits at the end of the financial year. 

The tax rules are directed towards private landlords, which means that limited companies can deduct their financial costs from their buy to let properties and only their profits will be subject to tax.

The changes in the buy to let mortgage tax relief rules have led to more landlords looking to set up limited companies to avoid the rules. However, it is important to review the associated costs before setting up a limited company.

Changes to Buy to Let Regulation

There are some changes to the buy to let regulations that have altered the way lenders consider applications.

From 2017, landlords can no longer spread equity across their entire portfolio.Lenders will now take an in-depth look into the landlord's property portfolio to ensure all their properties are profitable. Lenders will refuse to provide a buy to let mortgage to landlords with one or more properties that are not profitable.

In addition, lenders will apply a stricter income stress test. This means that lenders will require landlords to demonstrate that they can afford mortgage payments, even in the event that the interest rates increase to 5.5%.Finally, landlords will need to have a rental coverage ratio of at least 145% for standard buy to let properties and 170% for houses in multiple occupations.

The additional 45% to 70% is required to act as a safety net for the time when a landlord's property is without tenants. To satisfy lenders, the rental coverage ratio will have to be based on a professional surveyor's valuation. 

How buy to let mortgages work

To all intents and purposes, a buy to let mortgage operates in a very similar way as a standard residential mortgage. You can choose from a range of buy to let mortgage offers, including fixed rate, variable rate, and tracker mortgage deals. However, buy to let mortgages can differ from residential mortgages in several key ways:

What do you need to get a buy to let mortgage?

The truth is, there are no special ‘self employed mortgages’ that are offered by lenders. As a self employed person you will be applying for the normal buy to let mortgages as other people who are on a company payroll, the key difference is that it is usually more difficult to prove your income to a lender than someone who has a fixed salary.In order to get a buy to let mortgage from a lender, you will need to prove your income to the mortgage lender. The more accounts you can show, the stronger your application will be. Although a lender will typically want to see:

• Two years of accounts - Some lenders will consider 1 years' worth of accounts.

• Good credit history - A good credit history helps.

• Record of regular work - Different lenders will have different criteria on this.

• A strong deposit -  Buy to let mortgages are seen as being of higher risk. Lenders generally require larger deposits, commonly requiring borrowers to put down deposits of at least 25% of the property’s value. However,there are options available for smaller deposits.

Gain advice from a mortgage broker or independent advisor

Conducting your own research is vital when looking for the buy to let mortgage that suits you, however comparing the options available to you can often be overwhelming.

That is why it is often a good idea to contact an independentmortgage broker to analyse your situation and give you assistance in achieving your mortgage goals. 

If you think you may benefit from aid of an independent mortgage adviser, you can fill in our online contact form to request a call back from our buy to let advisory team, who can provide you with a free initial consultation about mortgages, or you can contact us directly on: 0117 403 4474