Mortgage Solutions Merseyside
Mortgage Solutions Merseyside
Tel : 0151 428 7237 or email info@m-s-m.co
"We are here to help contact us for a free no obligation quote"
Buy To Let
Buy To Let
Find your deal and apply now - click here
With a buy to let mortgage many lenders will base the amount of advance they are prepared to lend based upon the rental income that a property is expected to achieve.
The majority of lenders now tend to use a rental calculation based on the amount of the mortgage advance using a stress test or ICR ( interest coverage ratio) ie £100000 x 6.5% /12 x 145%= £785.42 (rental projection amount pm needed)
The stress test varies between lenders and on whether you are choosing a 5 year deal ( currently the interest rate stress rate is lower on a 5 year fixed deal which allows greater lending that a or shorter term deal ie 2 year fixed based on the rental received
Most lenders use rental calculations at 125% for basic rate tax payers and 145% for higher rate tax payers
Some lender will consider top slicing using additional earned income or rent to increase lending capacity
Please feel free to phone to discuss any questions that you may have
Before you purchase a property on a buy to let basis you should also consider the following
Do you wish to buy in your individual name or through a limited company
Check out quotes both ways and then check out with your accountant which is the most tax efficient way
for you to proceed
Area & Tenant
Area that you wish to buy in
Demand in the area for property
Type of tenant you will rent to ( council, students, professional)
Expected rental income from the property
You will need to check carefully that your proposed property, and that tenant is acceptable to your lender (as some lenders refuse to lend on ex council property, and / or DSS tenants).
Deal
Consider what type of deal you wish to have
Fixed, Discounted or Tracker
Do you want to repay your mortgage on a Capital and Interest basis or Interest only basis
Do you want to be able to make overpayments on your mortgage.
Other Matters to Consider
Allow yourself a surplus emergency fund as this will allow you to carry out any repairs or alterations to the property
Allow you a fund for periods when the property is not rented out (change of tenants)
Be aware of the tax implications of owning the property
If you require any assistance please contact us and we will be able to assist you with your enquiry.
Find your deal and apply now - click here