Buy To Let First Charge Mortgages

13. 01. 09
posted by: addeduser
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Buying a property to rent out can be an excellent way to generate an income for the present and a good investment for the future.

Buy-to-Let First Charge Mortgages?

Buying a property to rent out can be an excellent way to generate an income for the present and a good investment for the future, if you can’t afford to buy outright, you will need a buy-to-let mortgage rather than a conventional FCA regulated mortgage.

What is a buy-to-let first charge mortgage?

Buy-To-Let (BTL) mortgages are for homes that you wish to rent out , they work in the same way as standard FCA regulated mortgage although the rates are often higher, and the lender would consider this type of mortgage a higher risk. This is because landlords usually rely on rent from their tenants to cover their mortgage costs, if there is a long period where they don’t have a tenant, usually known as a ‘void’ period, and so there is a risk of them missing payments on the mortgage and eventually defaulting on the mortgage. BTL’s aren’t regulated by The Financial Conduct Authority and as a result have different criteria for proving income and affordability.

On buy-to-let properties you would have to put down a bigger deposit than you would have to with a standard FCA Regulated mortgage, which is typically around 25%, Lender fees can often be higher than a standard FCA Regulated mortgage too.

FCA regulated mortgages don’t always need as much of a deposit and carry lower arrangement fees, however never be tempted to opt for a standard mortgage and then in the future rent the property out, as you will effectively be committing mortgage fraud. If the lender finds out they could potentially withdraw any special rate you might have been on the mortgage, they can change the terms and conditions and even refuse to continue lending to you, which would mean you would then be served a notice to redeem the mortgage meaning you could potentially lose your home.

Traditionally on the high street you would have to own your own home first before you could obtain a BTL Mortgage however Beech Finance have lenders who specifically lend to people with little or no experience.

Income

Beech Finance have relationships with lenders who don’t require you to have a personal working income, we have helped thousands of property landlords who are solely property investors and live of their rental income. The majority of the high street lenders require you to have a minimum income of £25,000 and you may experience a series of rejections before you arrive on our website. But don’t worry, even people with historic adverse credit can obtain BTL mortgages, as we can source plans specific for people with impaired credit ratings.

How much can I borrow?

Beech Finance have access to a variety of BTL mortgages from £10,000, but the amount you can borrow depends upon your personal and financial circumstances, the property in question and the size of any deposit you can put down.