Financial Mortgage Advice

Leaf Financial Advisers Ltd.

Buy to Let Mortgages

Leaf Financial Advisers are an FCA approved mortgage broker who offers a Buy to Let mortgage service and financial advice in Bristol and across the UK.  

We search the whole market for the best value mortgage products for you, as we are not tied to a specific lender.

Simply complete our contact form and a mortgage adviser will call you back to arrange a meeting.

  • Whole of Market advice
  • We do all the paperwork
  • We submit the mortgage application for you

Get in touch

Flexibile Appointments

We offer flexible appointments, including evenings and weekends, not just 9 – 5.  Because good advice fits around your schedule, not ours.

Personal Adviser

You will be assigned the same Mortgage Adviser from the start to the end of your journey. Someone to speak to if you need an update, have a query or just want a chat; they will be there for you.

Independent

Our independent status means we are not tied to any one mortgage lender or panel of lenders, helping you get the best deal possible.

What do we mean by the nest service?  We can’t understand when we hear hear or see complaints that their broker dosn’t pick up the [phone

Why A Mortgage Broker

How Much Can I Borrow?

With a few quick questions a broker will be able to give you a rough idea of what a bank is likely to lend to you.  It will take a longer conversation and more questions to give a more accurate answer.

The main facts that a bank consider is the value of the property, the amount of rent, other BTL’s you may have and possibly also your personal income situation.

Not everybody or every property is eligible for a BTL mortgage with every lender.  Differing acceptance rules across lenders make it key to not assume you will accepted and check beforehand if you meet the criteria.

Can I get an Interest Only mortgage?

Unlike Residential mortgages (where Interest Only mortgages are now very difficult to obtain) it is still possible to borrow for a BTL with an Interest Only mortgage.  

With an Interest only mortgage you do not pay off any of the loan with your payments, just the interest each month.  This is different to a Repayment mortgage where the monthly payments also include a payment to reduce the loan.

Whilst the main advantage of Interest Only is the lower payments making the loan more affordable, the debt will not e paid of by the end of the term as with a Repayment mortgage, leaving the borrower to arrange a method of repaying the loan at the end of the term.  For example by selling the property or having a separate savings or investment pot built up to make the final repayment.

Do I need a non-rental income to get a BTL mortgage?

No! However, many mortgage providers will only lend if you have a minimum employment income (often around £25,000) and may also apply an affordability test.  If you don’t meet this income requirement then there are lenders who will still lend, although you may need to prove that you have a certain level of savings or other household income.

Many customers ask why do lender care if they have a job when the mortgage is for the Buy To Let Property.  The answer is that lenders want to make sure that the you have the financial strength to deal with any void periods that may arise (the period when one tenant leaves and another arrives).

A broker will be able to help work out which lender is right for you and make sure you don’t get declined by applying to the wrong one.

What Are The Next Steps?

 

Once you get in touch with a broker (preferably a whole of market and independent broker) they’ll run through your situation and there will be questions to answer around your income, property, expenses etc.

and following on there will be some documents that you will need to provide.

Your broker should be able to get back to you with a mortgage with

most suitable and low cost mortgage from the makret.

get in touch...

Talk To a Buy To Let Expert:

Let us know what the best time is for us to call you. We will get one of our mortgage advisors will be in touch to talk through your situation and available options

Drop us a line: contact@leafifa.co.uk

Give us a ring: 01173 823 823

What information will I be expected to provide?

There is usually less paperwork involved in a Buy to Let mortgage than a residential but you should still be prepared to provide the following:

  • Proof of ID (passport/driving license)
  • Proof of address
  • Proof of income:
    • Employed usually the last 3 months payslips
    • self Employed your SA302 or similar tax returns
  • Mortgage statement for your existing property
  • Proof of rental income

 

The above list is not exhaustive, the documents you will need to provide will depend on your situation and the lender you apply to.  For example if you are purchasing with a gifted deposit then you may be required to show proof of the source of the deposit.

What is the difference between a buy-to-let mortgage and a residential mortgage?

A residential mortgage is for those who intend to live in the property themselves. Otherwise, you would need to apply for a buy-to-let mortgage.

Generally speaking, buy-to-let mortgages are seen as riskier than residential mortgages, because there is no certainty the property will always be occupied, or that tenants will pay on time.  A buy-to-let mortgage normally requires a larger deposit than a residential mortgage, with many lenders capping lending at 75% of property value, whereas a residential mortgage often lends up to 95%.  You may face larger upfront fees and/or pay a higher rate of interest and there is also the consideration of having to pay additional stamp duty for a second property. 

Typical residential mortgages require repayments of both the loan and interest each month. However, with buy-to-let mortgages, most landlords choose an interest-only mortgage whereby landlords only pay the interest repayments, which is a considerably lower payment compared to those with residential mortgages.

At the end of the mortgage, the owner is required to repay the mortgage in full. So if you borrowed £75K for your buy-to-let mortgage, at the end of the mortgage you owe your bank £75K.

Most will repay this by selling the property, however, house prices may have lowered, so it’s always wise to have the amount in savings as property prices can fluctuate.

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Knowledge bank

“A Few Weeks” is a general answer – there are quite a few factors that make each case unique.  A quick chat with an independent mortgage broker and they should be able to give you a more accurate estimate.

Along with standard ID checks (ID & Address) you will need to provide information around your property, rental income, current mortgages (if any) and potentially personal income information and bank statements.  

Most borrowers take out an interest-only mortgage for their chosen property. They then only pay the interest on the loan as it accrues every month, generally from the proceeds of the rent they collect. The capital debt – the full amount of the mortgage – is paid at the end of an agreed term.

Not everyone is entitled to take out a BTL mortgage though though, they are more expensive than typical mortgages, and require deposits of between 25% and 40%.  You may also need to have a certain level of rental income, personal income or personal savings.

If your lender doesn’t grant you consent to let, or it’s not suitable for your situation, you can switch the mortgage on your home to a buy-to-let mortgage.  To change from your residential mortgage to a buy-to-let one you would remortgage onto a completely new product, potentially with a new lender.

A residential mortgage is for those who intend to live in the property themselves. Otherwise, you would need to apply for a buy-to-let mortgage.

Generally speaking, buy-to-let mortgages are seen as riskier than residential mortgages, because there is no certainty the property will always be occupied, or that tenants will pay on time.  A buy-to-let mortgage normally requires a larger deposit than a residential mortgage, with many lenders capping lending at 75% of property value, whereas a residential mortgage often lends up to 95%.  You may face larger upfront fees and/or pay a higher rate of interest and there is also the consideration of having to pay additional stamp duty for a second property. 

Typical residential mortgages require repayments of both the loan and interest each month. However, with buy-to-let mortgages, most landlords choose an interest-only mortgage whereby landlords only pay the interest repayments, which is a considerably lower payment compared to those with residential mortgages.

At the end of the mortgage, the owner is required to repay the mortgage in full. So if you borrowed £75K for your buy-to-let mortgage, at the end of the mortgage you owe your bank £75K.

Most will repay this by selling the property, however, house prices may have lowered, so it’s always wise to have the amount in savings as property prices can fluctuate.

A buy-to-let mortgage is a mortgage that’s sold specifically sold to people who buy property as an investment, rather than as a place to live. If you plan to rent out a new property, most lenders will prefer you not to finance your purchase with a buy-to-let mortgage rather than a standard residential mortgage.

The minimum deposit for a buy-to-let mortgage is usually 25% of the property’s value (although it can vary between 20-40%). Most BTL mortgages are interest-only. This means you pay the interest each month, but not the capital amount. At the end of the mortgage term, you repay the original loan in full.

Unlike Buy To Let mortgages which are taken out by specifically to purchase a property to then let out (or to re-mortgage one they currently let out), Let to Buy mortgages are used when you live in a property and want to move elsewhere and let out your current residential property.

If you have enough equity in your home, you remortgage onto a Let To Buy mortgage and release funds so you can put down a deposit on a new home. You original residential property can then be let out and you can use the rental income to cover that mortgage. This then allows you to get a mortgage for a new home, assuming you can cover the repayments with your salary and other sources of income.

get in touch...

Talk To a Buy To Let Expert:

you can drop us a line with any queries you may have and we’ll get straight back to you.

alternatively just give us a ring or fill out a contact form and we can call you back at a time that’s convenient.

Drop us a line: contact@leafifa.co.uk

Give us a ring: 01173 823 823

Fill out our contact form and an adviser will call you back.

Give us a ring for a Free no obligation discussion on how we may be able to help you: 01173 823 823

Drop us a line with any query you may have and we'll make sure we get back to you as quick as we can: contact@leafifa.co.uk