Simmonds Mortgages

Mortgage Brokers covering Berkshire and beyond

Call: 01344 225 149 or 07979 690 056

Buy To Let Mortgages Explained

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Buy-To-Let Mortgages Explained

What is a buy-to-let mortgage?

A buy-to-let mortgage is for people who want to purchase a property as an investment in order to let it out to tenants. As you will not be living in the property, you wouldn't be able to purchase it on a standard residential mortgage.

What deposit do I need for a buy-to-let purchase?

Most lenders will require a minimum deposit of 25% however, the number of lenders offering products with a 20% deposit has grown in recent times but be aware as interest rate may rise in this scenario.

Interest Only or Repayment?

Most landlords especially those with one or more buy-to-let properties use interest only mortgages as their preferred option to finance their investments.

This can seem strange as you would ask why wouldn't you want to pay down the debt each month?

With buy-to-lets, the rental income will cover the mortgage payments and if this is on an interest only basis, the monthly payments will lower, meaning more return each month!

The mind set of most landlords is to sell the property at the end of the mortgage term, with the likely event of it rising in value.

Most lenders allow over payments to be made each year up to 10% of the outstanding debt so this can act as a way of paying down the mortgage which is a favourable incentive to have.

How much can I borrow?

With a residential mortgage the amount you can borrow is based on your income and your commitments, with buy-to-let it works differently however, those aspects are still considered.

The gross income the buy-to-let property makes each month is key to how much you can borrow; each lender has a different rental stress calculation that considers the rental income and the tax position of the client.

Many lenders do not require a minimum income and in many cases if a provable income is received the buy-to-let application will be considered.

Not all Buy-To-Let Mortgages are regulated by the Financial Conduct Authority

 

We can help you!

If you would like more information or help with your mortgage please call us on 01344 225 149 or 07979 690 056. Alternatively please send us an email at info@simmondsmortgage.co.uk

Your home may be repossessed if you do not keep up repayments on your mortgage

 

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Simmonds Mortgage Services is an appointed representative of Stonebridge Mortgage Solutions Ltd and can source the most appropriate cover from its panel of insurers with a free review of you overall protection and insurance needs. As with all insurance policies, conditions and exclusions will apply.

What our Customers Say...

Your home may be repossessed if you do not keep up repayments on your mortgage.

Simmonds Mortgage Services Ltd is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority.

Registered Office: Simmonds Mortgage Services Ltd, Lexham House, Forest Road, Binfield, Berkshire, RG42 4HP. Registered Company Number: 1152 8784 Registered in England & Wales.

There may be a fee for arranging a Mortgage and the precise amount will depend on your circumstances. This will typically be £399.00 paid once the mortgage offer has been confirmed.

There may be a fee for arranging an Equity Release or Lifetime Mortgage and the precise amount will depend on your circumstances. This will typically be £799.00 and is due on completion of the mortgage.

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