Below we explain a rough outline of what buy-to-let mortgages are.
What is a buy-to-let (BTL) mortgage?
BTL mortgages are designed to help you buy a property that you intend to rent out to other people, rather than have as a main residence.
If you plan to rent out a new property, most lenders will prefer you not to finance your purchase with a standard residential mortgage.
Who can get these mortgages?
You can get a buy-to-let mortgage under the following circumstances:
If you –
- want to invest in houses or flats.
- can afford to take and understand the risks of investing in property.
- already own your own home, whether outright or with an outstanding mortgage.
- have a good credit record and aren’t stretched too much on your other borrowings, for example, credit cards.
- earn £25,000+ a year. If you earn less than this you might struggle to get a lender to approve your buy-to-let mortgage
- are under a certain age. Lenders have upper age limits, typically between 70 or 75.
How does a buy-to-let mortgage work?
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.
Where can I get a BTL Mortgage?
Most of the high street banks and some specialist lenders offer these mortgages.
If you are looking for a BTL mortgage and need some advice this is where Mortgage Squared can help you!
If you need any advise on the above please get in touch with one of our advisors today – https://outlook.office365.com/owa/calendar/MortgageSquaredLtd@mortgagesquared.co.uk/bookings/
To find out more about Buy-to-Let mortgages take a look at our guide here Buy to let guide