What do I need to get a Buy to Let mortgage?

Mortgage lending in the UK has been challenging to achieve over the last few years and this has resulted in both a decline in demand for property and an increased number of people renting instead of buying. The impact of this has been to decrease property prices and increase rents which has revitalised the Buy To Let sector making higher yielding properties more prevalent. Many people are now therefore asking "What do I need to get a Buy to Let mortgage?" and so we have seen an increased demand for Buy to Let Mortgages and thought it wold be a good idea to put together a quick guide as to what is generally required when getting a Buy to Let mortgage:

1. Deposit: The deposits for BTL mortgages are generally higher. At a minimum you will require 20% but the more you can afford the better the deals that are available to you. Put down 40% or more and you'll get the most competitive rates.
2. Clean credit record: All mortgage applications are throughly scrutinised these days but none more so than BTL mortgages. While a blemish on your credit record may be excused for a residential mortgage, do not expect much leniency for a BTL. Any blemish will need a very good explanation
3. Experience: Banks prefer to lend to experienced landlords. If this is your first foray in to the BTL market as a Landlord you can get finance but with a couple of properties already under your belt the banks will look much more favourably on your BTL application if thy can see you now what you are getting int and have managed similar properties in the past.
4. Rental income: Your sums need to make sense. While it is important that you have a source of income yourself other than from the rental of the property (usually a min of £20-25,000 is expected) the property must stand up on its own and the rent earned on it should be greater than your interest payments by at least 25%
5. Fees: The Lender arrangement fees on BTL mortgages are generally higher and often inversely related to the interest rates (i.e. higher interest rates have lower fees and vice versa) but expect to part with up to 4% of the purchase amount. Mind you, as a broker our job is to make sure this number is as low as possible for you to get the best overall deal.

One other thing to be aware of when asking "What do I need to get a Buy to Let mortgage?" is that the property will need to be habitable in order to get a mortgage on it. If it isn't you may need to take a Bridging loan for 3-6 months while work is carried out to bring it up to specification. This is also something we can assist you with. For further information on Bridging loans or getting a Buy to Let mortgage either complete our enquiry form on the relevant page or call us on 0845 1260350.