First Time Buyer Buy To Let Mortgage
First Time Buyer Buy to Let Mortgage
Why choose us?
Fair Mortgages can provide you with a first class service if you are looking for a buy to let broker mortgage service.
Special features of what our broker service offers include:
- Rental Income Requirements - What lenders now require on rental income - we can help you through the lender criteria maze
- Whole of Market Buy to Let Broker - We deal with most UK buy to let lenders
- 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 whether you are a first time landlord or full time landlord
- Credit Issues? - We have lenders who will take into account previous defaults and missed payments if applicable
- Experienced BTL Investor? - Have a complex buy to let or have a portfolio of 5+ properties? - speak to us
To investigate your buy to let mortgage options, call our specialist team on 0117 403 4474 or fill in our call back form.
If you are thinking of becoming a landlord, you may be worried that your lack of experience could prevent you from securing buy to let finance.
While lenders may consider you to be of a higher risk, resulting in higher interest rates than an experienced landlord may expect, there is a range of first buyer buy to let mortgage options available from a variety of providers.
Tax Relief Rules
For anyone who wishes to become a landlord, it is important to be aware of the 2017 tax relief rule changes.
From 2017, landlords can no longer deduct their entire financial costs that arise from their buy to let property when calculating their profits at the end of the financial year. This will result in an increase to landlords' tax bills.
However, the new tax rules do not affect limited companies. This has led to an increase of private landlords looking to set up their own limited company for their buy to let properties. Although this may seem like a good way to avoid the effect of the tax rules, there are some considerable costs to setting up a limited company that should be considered.
Getting a Buy to let Mortgage For The First Time
While it can be possible to secure residential mortgages with relatively low deposits, buy to let lenders tend to require a maximum Loan to Value of 75%. This means you may need to be able to put down at least a deposit of 25% of the property’s value. However, there are buy to let products available with smaller deposit requirements.
As with all mortgages, the larger the deposit you can afford to put down, the more options will be available to you and the cheaper your interest rates will be.
The application process of buy to let mortgages has a few distinct differences from getting a residential mortgage.
How a lender will calculate your affordability will differ from a residential mortgage. While many lenders still have a requirement for the minimum income of an applicant, the actual affordability of the mortgage is calculated on the potential rental yield of the investment property.
From 2017, lenders will require a monthly rental yield of the property to be at least 145% of what the mortgage payments would be and 170% for houses in multiple occupation. The additional rental coverage percentage accounts for any period of time where a landlord's property is without tenants.
It should be noted that the estimate of rental value must be based on a professional surveyors' valuation. It does not suffice to simply tell the lender how much you intend to let the property for.
For new buy to let landlords, it is important to note that lenders apply a strict income stress test. The income stress test is designed to ensure that landlords can afford mortgage payments in the event that the interest rates increase to 5.5%.
For landlords with multiple properties or new landlords who wish to have a property portfolio, it is integral to ensure that all the properties have a positive return. This is because lenders will no longer look at properties in isolation and review the landlord's entire property portfolio. Therefore, landlords cannot spread equity across their portfolio and will not be able to secure a buy to let mortgage if one or more of their properties are not profitable.
Different lenders may also have specific requirements about how you let the property, such as requiring tenancy lengths to be of a minimum duration.
BTL Mortgages Calculator For First Time Buyers
You can use our buy to let calculator for first time buyers on this website to search different buy to let mortgage options, which might help you find out what could be suitable for you. You just need to enter all of the relevant financial information and make sure you are searching buy to let mortgages, the tool will then filter a selection of finance products from a range of different providers that fit your relevant criteria, so you can compare them.
BTL Mortgage Broker
You may also benefit from speaking to an independent buy to let mortgage broker. Not only can independent mortgage advisers provide you with impartial advice throughout the application process, but they can search the whole of the market on your behalf to find the products that would fit your needs.
There are also smaller specialist lenders, not on the high street, who offer mortgages that can only be applied for through an intermediary such as a mortgage adviser.
If you think Fair Mortgages may be able to help you, you can 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 403 4474