If you are acquiring a buy-to-let property in the UK, you should be aware of the mortgage options. There is a specific type of mortgage for Buy-to-Let (BTL) purchases from different banks. Under normal circumstances, the amount you can borrow is based on assessed rental income of the property in question rather than the salary of the mortgagee.
Mortgage rules are different in each country and in the UK it is the rental income that matters for BTL properties. Besides, the interest rates for BTL mortgages are always higher than standard residential mortgages. It means, buyers of BTL properties will pay more interest on the mortgage than buyers of residential homes meant for own use.
In addition, the landlord should meet several conditions before a bank can sanction the mortgage. The type of mortgage you can secure will be subject to common conditions including the following: Rental income likely needs to be 125% of the mortgage repayments; Deposit likely to be in excess of 25% of the property value and the minimum annual salary in addition to the rental income will be taken into account.
Before you purchase a BTL property, make sure that you have informed your estate agent about your plans for mortgage. For more information on mortgage options in the UK, contact Strawberry Star experts by calling our London office.
Amount you can borrow is based on assessed rental income of the property in question rather than the salary of the mortgagee.