This Buy to Let Explained page has been created to provide links to answers to the most Frequently Asked Questions regarding Buy to Let. We have consolidated the best read Buy to Let articles, written by Property118 Partner Neil Patterson, to provide you with an overview of the information and explainations which can be found here at Property118.com.
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The first thing to bear in mind is that lenders perceive a buy to let mortgage as a self funding commercial business proposition with the rental income covering the loan repayments. Buy to lets are an “off the shelf product” very similar to residential mortgages, but are not regulated under the FSA in the same way and do not normally require your personal income to cover the loan repayments. Read more
Firstly to give a level playing field you need to make two assumptions:
- You have decided on the type of rate Fixed or Variable e.g. both products will be the same (see previous article) To fix or not to fix.
- You would like an interest only mortgage
Next you need to decide over what period of time you would like to compare the cost of the products. You need to consider longer term strategy that will affect your mortgage decisions such as plans to raise capital, pay lump sums off, sell, remortgage etc. Read more
There are 3 questions I think you should be honest with yourself when asking:
1. Can I afford to pay that amount
2. Am I happy to pay that amount
3. Can I ignore what is happening to interest rates around me Read more
It is technically possible to purchase auction property with a buy to let mortgage, but the costs and risks are too high for anything other than a minute percentage to actually complete. Read more
A buy to let mortgage in lending terms is very similar to a residential mortgage regulated by FSA rules, but just because something looks like a duck and sounds like a duck doesn’t always mean it is a duck. Buy to Let is still in most circumstances considered to be a commercial loan, and borrowers are deemed to have a greater knowledge of the implications of their actions than someone looking to purchase their own main residence. There are however, two common exceptions Read more
Banks often have a surprisingly vast array of criteria that needs to be considered when lending. I have compiled a list of questions a lender will ask and factors to consider when purchasing a flat. Although fairly in depth, I would not consider this exhaustive as after 15 years I know it is still possible to run across circumstances not seen before. Read more