When it comes to regular domestic home loans, there are many products on the market ranging from special offer deals to fixed- and variable-rate loans. With a buy-to-let mortgage, some lenders only consider your rental income, and others place more emphasis on your normal earnings, especially when you only have one or two rental properties. To find out more about buy-to-let mortgages, click here.
Your expected rental income must exceed your mortgage repayments by a certain percentage. Your mortgage lender may require a rental income of between 100% and 130% with the most common percentage being 125% at this time. Your lender will also want to establish whether the property you are buying is a good long-term investment, and buy-to-let mortgages are subject to the usual status checks. Generally buy-to-let mortgages are available for between 5 and 45 years and for up to 80% of the property value.
When considering a buy-to-let mortgage, it is necessary to think about additional costs such as letting agent's commission, insurance premiums for building and contents cover, and rental and legal expenses. You should also consider the costs of keeping the property in a suitable condition for letting, service charges, and ground rents when the property is leasehold. Additionally, not all forms of mortgage are regulated by the Financial Conduct Authority.
Contact us for simple and easy fixed-rate loans to help you with your finance planning.