Should you use a limited company? How much deposit should you put down? How best to raise capital? Building your investment portfolio is a complicated process. Our mortgage team have vast experience with other landlords and investors and so are able to guide you on your buy-to-let journey.
Find the best mortgage product
We search the major high street lenders like HSBC, Nationwide and Santander and many more, as well as smaller specialist lenders, all to get you the best deal.
Advice on different strategies and raising capital
We have seen it all before, the good deals and the bad. Avoid the pitfalls of but-to-let investment and speak with our expert team.
Recommend solicitors
Choose a slow or disorganised lawyer and you could loose your property, because we deal with so many property transactions each month, we know which solicitors are fast and efficient.
Coordinate your survey and related checks
Mortgage valuations, homebuyers reports and structural surveys, we can help you avoid any nasty surprises.
Access exclusive mortgage products
In addition to thousands of mainstream mortgage products, we have access to many exclusive products that aren't available elsewhere.
Co-ordinate the mortgage process
Once we have found you the right product, we provide advice and guidance throughout the whole process from start to finish.
What is a buy-to-let mortgage?
You can only get a standard residential mortgage if you plan to live in the property yourself, Buy-to-let (BTL) mortgages are for landlords who want to buy property to rent it out. Buy-to-let mortgages are similar to residential mortgages, but there are key differences.
Buy-to-let mortgages are often more expensive than residential mortgages as they represent a higher risk. This is because it is unlikely that your buy-to-let property will constantly be occupied and there may be periods where tenants are unable to pay the rent.
The amount you can borrow is normally based in the likely rental income generated buy the property (instead of your income), this makes sense as the mortgage payments need to be less than the rent in order to make the purchase viable in the long term.
For those who are self-employed, or employed by their own limited company, things are significantly more complex. In the main lenders would want to see profitable accounts for the last couple of years.
Often landlords only pay the monthly interest on the mortgage loan, rather than repayments on the loan itself (repayment mortgages). This is known as ‘interest only’ and results in lower monthly payments for buy-to-let mortgages. However, the mortgage must be repaid in full at the end of the term so the property may have to be sold in the long term to repay the mortgage debt.
How much deposit do I need?
Once again, the amount of deposit you require is heavily influenced by the choice of lender. For example, one high street mortgage provider online is willing to lend with a 15% deposit, whist others will require 25%.
What costs can you expect?
Product fee
From £0 to £5000+ it varies from product to product, it can sometimes can be added on to your overall mortgage borrowing.
Booking fee
This is sometimes charged when you apply and is not usually refundable even if your application fails. Costs vary from around £100 to £250.
Valuation fee
The mortgage provider will instruct a survey to provide a realistic valuation of the property. This is done to ensure the property is worth the asking price and the amount you wish to borrow. This can cost between £150 to £300.
Telegraphic transfer fee
The cost of the mortgage provider to send the loan money through to your solicitor. This usually costs £25 to £50.
Mortgage account fee
This is an administration fee from your lender for setting up your mortgage. This usually costs around £100 to £300 and is actually paid when you repay your mortgage in full.
Stamp Duty
This will vary depending on your circumstances and the value of the property being purchased. It also changes regularly so speak to your advisor to properly calculate this figure. Remember a surcharge is often applicable for additional properties.
Buildings Insurance
Mortgage providers will insist that you have a buildings insurance policy in place in order to protect the asset (your home) that they are lending against. This can be around £150 a year, although its usually combined with some form of contents insurance pushing the figure to around £300 (depending on your circumstances).
Solicitor / conveyancing fees
For all the legal work (obtaining local reports, liaising with the sellers’ solicitor and your mortgage company and for expediting the financial transactions) expect to pay between £850 and £1,500.
Should you go to your bank for a mortgage?
With thousands of mortgage products out there, the chances that your bank offer the most competitive deal available are very slim – for this reason we do not recommend going to your bank for a mortgage.
Where is it best to go for a mortgage?
A broker who can look at a wide range of banks and lenders is always your best option and this combined with their specialist knowledge and advice will ensure that you get the product that’s perfectly suited to your own personal requirements.
Dunham McCarthy Mortgages is one such specialist. We can also help you with other requirements such as life insurance, critical illness cover and income protection – acting very much as a ‘one stop shop’ adviser and provider for all your mortgage and property needs.
