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Buy to Let Mortgages

If you are looking for a buy to let mortgage, our team of award winning brokers would be pleased to assist. At Mortgage Lane, many of our advisors are buy to let investors themselves, so we really understand the value in the products we recommend. Whether you are first time buyer with a low credit score or an experienced portfolio landlord we are well versed with your situation.

PROCESS BREAKDOWN

Information gathering and advice

The first process in your mortgage application will be gathering or updating information in relation to the property, tenants, or yourself. Once this has been established your expert buy to let mortgage broker will make a product recommendation.

Credit approval

Once you are satisfied with the product recommended and have confirmed to proceed, this will usually be submitted the same day to give you a decision, until this point there is still nothing to pay! As long as the Agreement in Principle (AIP) was approved, we can move to application stage where fees become payable.

Application, valuation & underwrite

Once the application is submitted, your valuation will be booked in and most of the time (depending on the lender). This will usually completed once your initial underwriting has been completed. Once the valuation is returned, if acceptable, the lender would then look to make a formal offer. You can then move to legal stage.

Offer and completion

Once you have had your buy to let mortgage offer, you will require adequate legal advice and then once you’re happy, your solicitor can draw this down once the legal requirements are satisfied. Your broker at Mortgage Lane will always be checking in on the application post offer, so we are chasing for you too!

Buy to Let affordability and beyond

Unlike residential properties, Buy to Let mortgage affordability is calculated via the received rental income (for re-finances) or projected rental income (for purchases).

Sometimes mortgage lenders, or valuers may not provide a mortgage or valuation where a property is within the close proximity of a commercial property that may reduce kerb appeal or “resale ability demand”.

Whilst some mortgage lenders do enforce a minimum income requirement (often £25,000), the majority of lenders do not have a minimum income requirement, as long as some level of an income can be evidenced.

Types of Residential Buy to Let mortgages

We assist both business owners and investors with Commercial Mortgage advice. Below we explain all the types of variations you might come across as well as information on different ownership types and how this can impact your mortgage options.

Single let mortgages

A single let is a property rented to one household. Mortgage lenders do not usually require any experience for this letting type, so it can be suitable for first time investors or landlords looking to expand their portfolio.

Lenders will access these properties against the valuers estimation of what the Assured Shorthold Tenancy (AST) will produce in rental income and not what you’re achieving. Please see more information on stress testing in our FAQ

Small HMO mortgages

Not all Houses in Multiple Occupation (HMOs) necessitate planning permission or licensing, and for such properties, there are a select few lenders who might consider them under their standard residential buy to let mortgage products. When it comes to limited company lending, the options are relatively fewer.

Alternatively, we are able to achieve a HMO mortgage on a small HMO, where the lender understand the lack of requirements for licencing and planning, whilst this isn’t wide spread, Mortgage Lane have been successful in working with lenders that have completed on multiple small HMOs that have not required these items. Please also refer to our HMO page.

Learn more about HMO Mortgages >

Heritage properties

Grade 1 and Grade 2 listed buildings are not always approved by residential mortgage lenders, however the advisors at Mortgage Lane are connected with lenders that have products designed to lend against these asset types. These properties tend to be large in value and size, therefore we often see them designed as flats or Multi Unit Freehold Blocks (MUFB). Being large in value this can make achieving higher loan to values harder, yet even if that is the case we may also apply “top slicing” which adds in personal income to make up for shortfalls calculated when stress testing.

Applicants based overseas

At Mortgage Lane we have a well connected global reach of customers who we regularly assist with Mortgage Advice against residential UK property, for buy to let.

For Expatriates otherwise known as Expats these are applicants where individuals are from the UK but now living abroad. Often we deal with expats in Dubai, America, Australia, New Zealand, China, Hong Kong, Singapore and many more locations.

Where every you are, we have lenders that are able to lend to expats in the following circumstances:

No minimum income
No experience

For Foreign nationals that are not UK domicile (tax status) are able to get a UK residential buy to let mortgage, many of our investors reside in the above location and lenders typically base their lending around experience, credit foot print in the UK and sometimes a minimum income requirement. We do have lenders that will lend to a foreign national where the applicants have low income or no experience.

At Mortgage Lane we also assist overseas nationals get UK property mortgages where the country them are residing and where deposit funds derive, may be high risk on the Basel Index which is an annual ranking used by lenders to grade the countries Anti Money Laundering (AML) procedures.

If you also require a processing agent to make yourself eligible for UK mortgages, then we can also recommend a suitable company to assist you.

Learn more about mortgage for foreign nationals with Mortgage Lane >

Social housing mortgages

At Mortgage Lane, we specialise in offering tailored mortgage solutions for Social Housing Residential Buy to Let properties. Our expertise encompasses properties leased to a broad spectrum of social housing providers, many of whom handle complex care arrangements. We are adept at assisting clients in obtaining mortgages for properties that serve a vital role in both short-term and long-term social housing.

The varied landscape of social housing requires detailed knowledge of each property’s lease agreement. It is essential for clients to provide Mortgage Lane with comprehensive lease details for the property they are looking to purchase or remortgage. This enables us to accurately match you with a lender that is open to the lease’s specific conditions, including the social housing provider, lease duration, and tenant demographics.

In the realm of Social Housing Residential Buy to Let, we often encounter tenant types such as:

Care leavers
Individuals in need of assisted care
Ex-offenders

By understanding the diverse needs of these tenant groups, we can ensure the mortgage products we recommend are perfectly suited to the unique challenges and requirements of your Social Housing Residential Buy to Let property, guaranteeing a customised and efficient mortgage solution.

Learn more about our social housing financing options >

Specialist build types

At Mortgage Lane we are used to complex cases where the property might be non standard construction. We have successfully obtained mortgages on the following residential buy to let property types:

Cornish construction
BISF Steel construction
Precast reinforced concrete (PRC) construction
Timber builds
Timber frame
Flat roof
Deck access
Single skin build
Woolaway bungalows
Colt bungalows

Top Slicing

Top slicing on a residential buy to let mortgage is used where the rental income isn’t enough to achieve the desired loan size when stress testing. This gives eligible borrowers the ability to subsidise their buy to let affordability with their own personal income. This can reduce the impact of the increase in interest rates and may be useful to mortgage prisoners affected by this.

Top slicing is only offered by a handful of lenders, so please check in with an advisor at Mortgage Lane to enquire about these options.

Specialist buy to let mortgage options

We work with specialist lenders that allow for complex criteria points, which proves helpful to applicants looking to mortgage against properties with the intension to run as HMO, serviced accommodation, social housing and multi unit freehold blocks. Usually tier 1 or high street lenders either don’t allow for these strategies or will require experience.

Specialist scenarios we assist with:

No experience
Not a homeowner
No income
Adverse credit
Expats
Foreign nationals
Sharia Compliant
No six month rule

This thread is not legal or tax advice, if anyone is looking to do anything noted in the contents, we recommend you speak with a qualified individual.

ACHIEVE YOUR MORTGAGE DREAMS – GET IN TOUCH

TRY OUR BUY TO LET MORTGAGE CALCULATOR

ANSWERS TO COMMON QUESTIONS AND QUERIES ABOUT BUY TO LET MORTGAGES

How is affordability calculated on Buy to Let mortgages?

Buy to let mortgage lenders will use the rental income of the security property, which is the property you are buying or remortgaging.

If you are buying in your own name, you may be stressed harsher than an applicant with a basic rate tax bracket. As an example a basic rate tax payer might be stressed at 125% and a higher rate tax payer at 145%. For a 5 year fixed, the lender may stress against the payrate of that product, such as 5.89% for example. In this case the calculation would go as follows for a basic rate tax payer, receiving rent of £600pcm from the property. 600 * 12 / 1.25 / 0.0589 = £97,792 (maximum loan)

It is interesting to know that limited companies are stressed with a rental coverage of 125% mostly, unless it is a HMO. This means if you are a higher rate tax payer, struggling with stress testing and achieving hoped loan sizes, you may be able to borrow more on a limited company mortgage.