Buy to let mortgages
The buy to let market has changed considerably in recent years, with more changes on the horizon. If you are thinking about buying a property to let, there are a number of things that need to be considered.
Specialising in mortgages for contractors, CMME can advise you on the best buy to let mortgages currently available and help with the mortgage process once you are ready to move forward.
Having helped thousands of contractors on their way to becoming successful landlords, CMME understand that finding a buy to let mortgage isn’t always easy when you’re not in traditional employment. That’s why they’ve developed a hassle-free and straightforward way for independent professionals to find a mortgage that works for you.
Professional status should not be an issue when it comes to securing a mortgage and, utilising over a decade of experience, CMME ensure that contractors, freelancers and the self-employed are able to access buy to let mortgages in a quick and simple manner.
Buy to let mortgages are a popular investment strategy for contractors in the UK, and there are many lenders that offer mortgages specifically for the buy to let market, most of which require at least a 25% deposit.
For more information about a buy to let mortgage and to find out what is available to you, please fill in the form below and one of our specialist mortgage advisors will be in touch.
Before buying a property to let you should consider the following:
- Tenants; are you hoping to attract families, students or couples? Once you have decided this, it should help you choose a suitable location and property type.
- Condition; does the property need work doing on it? If so you must have enough money to cover the rent while you have no tenants.
- Location; is the property near shops, schools, public transport? Consider who your future tenants might be after. This way you hopefully won’t be left with an empty property for long periods.
- Rent; how much are similar properties charging?
Q. How much can I borrow to fund a buy to let property purchase?
A. CMME has access to schemes based almost entirely on the rental income that your purchase is expected to generate. This means they only need to show minimal proof of your income when applying for buy to let mortgage. However, most lenders will require that the expected rent covers between 125 to 145% of your mortgage payments.
Q. Can I buy a second home rather than a rental property?
A. This has become a growing concern for those contractors looking for a second home or getaway. CMME have mortgage schemes specifically tailored to help independent contractors take full advantage of the growing number of buy to let mortgage products and can help you secure finance without the need to prove that your own income can support both loans.
Q. I want to move but can't or don't want to sell my current home.
A. By reversing the buy to let concept, CMME can arrange a loan on your current property to finance the purchase of a new home. 'Let to buy' is an ideal solution if you're unable or don’t want to sell your current house but are looking to purchase a new property.
Q. I have an existing rental property. Can I release some of the profit made from my house?
A. CMME can arrange a re-mortgage that allows you to switch to an alternative scheme and release some of the equity in your rental property at the same time. Quite often these schemes can be fees-free or fees-assisted (where some of the fees are paid by your new lender). In this way a larger loan may cost you less than the existing one, due to the way we take the whole market into consideration when searching for a competitive rate.
Q. Will I have to pay a higher interest rate than on a residential mortgage?
A. Marginally higher interest rates are the norm when it comes to 'buy to let' mortgages. This is largely due to the perception that mortgages on rental properties are less secure that those attached to a property that’s considered a long-term home.
Q. How long do I need to have been contracting?
A. CMME have the ability to arrange a buy to let mortgage within a week of you starting your first contract.
Q. How long do I need to have remaining on my contract?
A. As buy to let mortgages are usually based on the amount of income expected from rental, the amount of time remaining on your contract is generally not important. However, some lenders do require a minimum of 6 weeks left on your existing contract.
Q. How long does the mortgage process take?
A. This largely depends on which lender both you and CMME agree best fits your circumstances. However, in some cases, CMME can have approval of your loan within minutes.
Q. What supporting documentation will I need to provide?
A. Ordinarily, CMME need proof that your existing mortgage is paid up to date and a two items of ID. A rental assessment on the new property from an ARLA registered letting agent would be useful in terms of initial underwriting.
Q Will I have to accept costly loyalty clauses to secure a mortgage?
A. CMME pride themselves on always securing competitive interest rates whilst avoiding schemes that don’t provide you with an open and honest account of the full costs. Too many contractors have been tempted by lenders offering a low headline-grabbing rate only to find that they suffer for long periods at higher rates and are penalised with fees and charges if you attempt to break free. We can recommend a competitive selection of schemes that will allow you complete freedom to move your borrowing at any time or, at the very least, grant you that freedom as soon as your current rate expires.
Q. What will happen to my mortgage rate after the initial scheme expires.
A. CMME will be in touch two months before the expiry of any special rate that you’re benefiting from to discuss your options. Comparing what is on offer from the current lender with what is available elsewhere in the market, CMME will strive to ensure that you secure competitive interest rates throughout the life of your mortgage.
Q. My main mortgage is a repayment loan. Shall I go interest only or repayment on this new purchase?
A. Your adviser will talk through the benefits of both but most CMME clients choose to opt for an interest only loan on the buy to let property. This keeps their repayments lower and helps them meet the 125% rule - where rental income must cover the repayments by 125 to 145% - that’s applied by most lenders.
Click here to see what options may be available to you.
ContractorUK are not authorised to offer regulated mortgage advice. ContractorUK are introducers to CMME.
Your home may be repossessed if you do not keep up repayments on your mortgage.
CMME is a trading name of CMME Mortgages and Protection Limited. Authorised and regulated by the Financial Conduct Authority (FCA reg. 414798). Registered in England No. 04886692. Registered Office: Albany House, 5 Omega Park, Alton, Hampshire, GU34 2QE. Please be aware that Commercial Mortgages, Overseas Mortgages and some Buy To Let Mortgages are not regulated by the Financial Conduct Authority. Calls may be recorded for training and security purposes and to improve the quality of our services.