Buy to Let Mortgages at DAS Finance
The buy to let sector in particular has seen a host of new regulations. Nowadays, portfolios are being handled differently and changes to lender criteria. As a result, applications that would have previously met mainstream criteria are now being classed as requiring specialist products, meaning traditional lending options no longer work for them.
DAS Finance in Essex keeps up with the times. We are fast paced and constantly adapt, meaning we can provide valuable expertise in this ever-changing market. Our professional and knowledgable team has access to a wide variety of exclusive finance products, and will use both their experience and DAS’s unique line-up of lenders to help you select the best option for you.
- Interest Only Available Options
- Rates from 1.49% on Individual name
- Rates from 2.49% on Limited Company
- Up to 85% LTV
- No Early Repayment Charge products are available
- Free Valuations available
What is a specialist buy-to-let mortgage?
A specialist buy-to-let mortgage is an application that does not necessarily meet the criteria of the mainstream lenders. Examples range from clients with a less than perfect credit history, to those looking to re-mortgage an investment property, to clients wanting leniency in rental calculations. We work with a panel of lender partners to identify which finance plan makes the most sense for you in your Buy To Let venture.
Why should I get a buy-to-let mortgage?
Buying a buy-to-let property can be a great way to make money, but it's important to know what type of mortgage you need before buying. There are a number of different options available so it's well worth shopping around to get the best deal for you.
Compare buy-to-let mortgages
When comparing buy-to-let mortgages, it is important to consider:
- The interest rate. Buy-to-let mortgage rates can vary quite a lot, but they tend to be higher than the best residential mortgages. This is because buy-to-let investors are usually riskier than homebuyers and require higher returns on their investment.
- The fee structure. For example, some lenders offer free products or discounts for transferring accounts from other banks or building societies. You may also want to look at any arrangement fees that may apply if you take out additional products with them such as insurance or credit cards.
- The product itself, including whether it's fixed rate or variable rate (variable rates tend to be lower), whether there's an early repayment charge and what the term of your mortgage is.
If you're looking for a remortgage rather than a new purchase (which means switching from another lender), make sure that your existing lender will allow you this option too and also check how much interest you'll have saved by doing so as this could help determine whether getting rid of your existing deal makes financial sense.
There are several factors that affect how much you can borrow. These include:
- your income
- your credit score
- the amount of deposit you have saved
The amount of money you can borrow is also affected by whether or not you have any existing mortgage commitments and whether or not you have recently purchased another property. The lender will consider how long it has been since your last mortgage application, as well as how much time has passed since a previous purchase.
There are a number of requirements for a buy-to-let mortgage, including:
You may need to be a homeowner. This means that before you can apply for a buy-to-let mortgage, you need to have owned (and still own) your primary residence—and this home needs to be paid off. The reason? In order to get approved for a loan and avoid paying private mortgage insurance (PMI), banks require that you already have enough equity in your first house so that they can feel comfortable lending money on another property.
If they don't feel confident in the value of your primary residence, then they'll likely require PMI coverage instead—and while PMI is required less frequently than it was in the past due to recent regulations, it's still something that many people want to avoid as much as possible because it adds more expense over time.
Down-payments on a buy to let mortgage
You may need at least 25% down payment saved up when applying for any type of home loan (including buy-to-let mortgages). This helps ensure that borrowers are able to keep up with their monthly payments without having problems later on if rates rise unexpectedly or prices fall unexpectedly—both situations which could cause homeowners significant financial hardship if not prepared properly beforehand.
Interest-Only buy to let mortgages
If you’re wondering whether or not to get an interest-only buy to let mortgage, the answer is yes, they are available. But there are some things to consider before you apply:
- Interest only buy to let mortgages usually have higher interest rates than residential mortgages. This means that your monthly payments will be higher, too.
- Interest only buy to let mortgages usually have shorter terms than residential mortgages. This means that your repayments will end sooner than if you had a normal residential mortgage with 25 years left on it (which would mean paying off the entire loan).
- Interest only buy to let mortgages normally have higher LTVs than residential ones as well - so check with your lender about this point before applying for one!
UK Minimum rental income 2022
In the UK, a mortgage lender may require you to have a minimum rental income of at least 75% of your monthly mortgage payment. This means that if you want to borrow £150k on a 5-year fixed rate with 2% interest, you need to be able to show that your monthly rental income will be at least £1,000 (75% of £150k).
If you don't have this income then some providers may still consider lending but with higher interest rates or additional security requirements such as guarantors or additional deposits.
Remortgaging a buy to let mortgage
You can remortgage a buy to let mortgage. This means that you can take out a new loan to pay off your current one. As long as you are still paying the mortgage on your property, then you can remortgage it again and again.
You can remortgage a buy to let if:
- You want to decrease the amount of interest paid each month
- You want a better rate of interest
- You want to shorten the length of the term
One way to ensure the a good deal is to get experts at DAS Finance to investigate the options available for you.
To make an accurate and educated decision regarding buy to let mortgages, you need to know what you are looking for and understand the market. You will also need to be able to compare the different deals that are available. Finally, you need to be able to make an informed decision about which mortgage is right for you so that when it comes time for your monthly payment, it won't break the bank!
If you are looking to buy your first property, you might want to consider getting a mortgage to ease cash flow concerns. But, if you already have a home and want something extra, then you may consider a buy-to-let mortgage. There are lots of different options available on the market today so it's worth shopping around before making any decisions. DAS can ensure an honest and efficient process designed to make complex finance easy.