Buy To Let

The mortgage itself, as with a conventional residential mortgage, is secured against the property for a certain amount of years. During this time, you will make monthly payments, and regularly review the rate of interest you have for the loan. Generally speaking, landlords will often opt for an interest
only mortgage, which means each month you are only paying the interest on the loan, therefore lower monthly mortgage payments. Of course, this does mean the capital does not reduce over time. By doing this, you are generating a larger profit each month from the rental income, but equally have a lower contractual payment to keep up with should the property be empty for a period of time. A majority of lenders offer an overpayment facility, whereby you can overpay without penalty, which people find very beneficial if they want to keep their payments low, but chip away at their balance as and when they have the funds to do so! If you are a portfolio landlord, you may be also offered a portfolio mortgage, which keeps everything under one mortgage, and one
payment.

For a buy to let mortgage, a 25% deposit will open up almost every lender to you and this is the most common deposit amount. Depending on your individual circumstances, there may be an option to put down a 20% deposit if you meet the required criteria. Of course, the more deposit you put
towards the property, the less risk to the lender, therefore the lower the interest rate for you! Here at Compare The Mortgage, we don’t just do the basic advice of what you can and cannot have, we will look to see how you can make the most out of your deposit to grow your portfolio. We have the knowledge of house prices and rental yields across the country, which we can utilise to look at your own property investment plan.

Ultimately, yes they are. Purely because they are for investing, and not to secure your own home. The interest rates and fees associated differ depending on the type of buy to let loan and can be higher for specialist and complex buy to let lending. However, as you can secure your mortgage on an interest only basis, the monthly costs are much lower, and there could be tax benefits for you also – we are not a tax specialist and do not give advice on tax. You should always speak to a tax specialist to understand your tax liability.

HMO is an abbreviation for a house of multiple occupancy. The definition of this is generally a property rented to 3 or more individuals who are not one household. A HMO is known to be one of the most profitable avenues of property investment, as of course you charge room by room rather than as one household, and if you buy in the right location, you’ll barely ever have a spare room! This type of loan generally attracts higher interest rates and fees, with quite often tighter criteria, so it’s important you have the right advice. At Compare the Market, we have seen almost every scenario, and have helped many people secure loans on up to 12 bedroom HMO’s, to securing finance to convert their existing property into a more profitable asset renting room by room. We have built up strong lender relationships over the years, as well as a wealth of knowledge in this area. So whether you’re completely new to property investment or HMO’s, or you’re an experienced HMO landlord, contact us and we will explore if we can make your portfolio that bit more profitable.

Often in the industry referred to as a Multi Unit or a MUB, this is a property which is one building containing multiple units within, that are let on an individual basis. The legal title of the building has not been split to create separate leases for the units – multiple units under one freehold. Once again, a very profitable business, and can consist of a block of flats, or in some cases elements of commercial within the block. There is great detail around the ins and outs of a multi unit block, and is imperative you get the right advice. Speak to one of our specialist buy to let consultants who have years of experience in this field to find out more and how this route may benefit you.

It’s very similar, but not quite the same. There are only certain lenders for this avenue of property investment, still a large amount, but not quite as many as you have available on a standard buy to let property. The way they determine the loan amount you’re eligible for varies from lender to lender, and quite often it is not the same as the calculation used on a standard buy to let, because of course you’re not letting it in the same way. At Compare the Mortgage, we will be able to research the whole market to find you the most competitive holiday let products – and we may be able to get one that allows you to holiday in it too!

This completely depends on your individual credit history. Many people think they wouldn’t be able to get a mortgage because they have adverse credit, this is an outdated view. We have a wide variety of lenders who can assist people with adverse credit, but of course it does depend on the severity and dates of registration of the adverse credit as to who we may approach, and what interest rate may be offered to you. Unfortunately, we can’t help everyone, but often it’s more achievable than you think. If you have a concern around your credit history, we will send you a web link to download your credit report completely free of charge, with no credit footprint affecting your score, so we can review before making any recommendations. Get in touch, and we will send you the link and answer your unanswered questions – you might have more options than you think.

A portfolio landlord is defined as an individual or a limited company director, who owns 4 or more mortgaged properties within their portfolio. All this means is that when a lender is assessing your application, they will view your portfolio more so as a business. This doesn’t impact things greatly, some lenders will assess the rental yield within the portfolio to ensure it meets their requirements, some may ask you for a business plan or cashflow statement (all discussed with yourself and your consultant), equally some lenders this makes absolutely no difference with. At Compare the Mortgage, we take great pride in offering advice around managing your portfolio, ensuring you get the most competitive rates, and even guidance on where you may be able to leverage the portfolio in the most cost effective way to grow your portfolio further.

Over recent years, owning investment property under your own limited company has become much more common, simply due to the benefits that come with this route. This can often have many tax benefits for you, and also enables you to have children or spouses, or whoever you’d like really, on the company as minority shareholders. Many people believe this sounds complex, setting up a company etc. but in reality it’s a very effective way of owning and renting property, and much simpler than you may think! Call us today and discuss the potential of a limited company purchase. Please note, we do not give tax advice and we will advise you speak with a tax specialist to review the benefits of purchasing under a limited company.

Most lenders will stipulate in the mortgage contract that you are not permitted to let the property to a family member, or live in the property yourself. At Compare the Mortgage, we do have access to lenders who will offer a family let mortgage, also referred to as a regulated buy to let mortgage. The reason lenders can be restrictive around this is that if your family member is renting the property from you, you’re much less likely to evict them from the property if they fail to pay the rent than you would be if it was an unrelated tenant. Therefore, higher risk to the lender that mortgage payments may be missed. Call us today and we will discuss if we can find a solution for you and your family member!