How To Get A Buy-To-Let Mortgage

So how do you get a buy to let mortgage? Well if you’ve been considering buying an investment property and you have yet to take the first step to see if you qualify, it's easier than you may think, and this video is for you. I’m Andy from and on this channel I share my experience as a property investor and landlord, and I also interview other investors so we can learn from their advice to, so if you're new here, consider subscribing for more videos like this.

If your homeowner buy-to-let mortgages are similar to residential mortgage but the amount you can borrow doesn't depend on the amount you earn. It depends on the amount of capital you have as a deposit, and the amount of rental income you can expect to receive on the property that you're looking to buy as an investment.

But I'd also like to add that it's easier to obtain a buy to let mortgage if you're already a homeowner. Now that's not to say it can't be done if your first time buyer, but there will be fewer mortgage products available to you. It's worth considering buying your own home first, and then renting any spare rooms to lodgers.

There is a generous tax-free amount you can earn by renting to lodges each year which will then help me to save for a deposit for your first buy-to-let property. And your then find it easier to obtain a buy to let mortgage. If you finding this video useful please drop me one of these (snap) as it helps to Channel a lot.

I'm not a mortgage broker myself and have a huge amount of knowledge, but after having taken out numerous buy-to-let mortgages I can tell you the basics, and qualify for the optimal amount of lenders on the market, which is huge by the way, you will need a good credit report and regular earnings of 25,000 a year or more, at the time of recording this video.

Interest rates tend to be higher on buy-to-let mortgages compared two residential mortgages, don't ask me why, but I suspect it's because you're setting up a business and the lenders want their small slice of the profits, or is that just me being cynical! Anyway it is worth paying the extra percentage point to get your new business up and running.

You will require a higher deposit compared to a residential mortgage because of the lenders see a greater risk for the property being occupied by tenants as opposed to homeowners. So they want you to have more skin in the game. Buy-to-let lenders typically look for a 25% deposit of the purchase price.

Although some lenders have mortgage products that will only to buy a property with a smaller deposit, but you can expect to receive a higher interest rate if you do that. The criteria for qualifying is going to depend on the size of your deposit, how much rent you'll be able to charge, whether you'll be a able to cover any voids, and passing a lend of stress test to ensure you can cover payments if interest rates go up.

You'll have the choice of regular types of mortgages including fixed rate, tracker and standard variable. Another key decision you'll need to make is whether you'd prefer an interest only mortgage or repayment mortgage. Now I have another video on the advantages and disadvantages of both types of mortgages, which I'll place on a YouTube card here.

And I'll also place a link in the description below. It's worth a watch, and I also share what type of mortgage I use. So what options are available to you when getting a buy to let mortgage? Well the first thing you can do is contact your bank. Now, not all banks provide buy-to-let mortgages, but if your bank does I will get as much information as possible so you have something to compare at the next step, which is to contact a broker.

In the past I've recommended finding a mortgage broker who deals with buy to let mortgage products only and also finding a broker who is an investor themselves. And that's because they can relate and fully understand your reasons and goals that you want to achieve. Now I still stand by that statement, but also realise there are many people that are very busy with their work and home life.

And they won't necessarily have the time to find and meet with people face-to-face. And if you're looking to buy your first investment property, I'd rather you get started today and make some enquiries to get the ball rolling. Let me briefly explain the advantages to using a broker. Firstly they act as an intermediary between you and the lender.

Essentially they do all the legwork. Also because buy-to-let mortgages are more complex, compared to your standard residential mortgage, they will sieve through and source the best mortgage products available to you, and help ensure that all the ducks are in a row before making an application. They'll also be able to answer any questions you may have, and will oversee the application process through to your mortgage offer.

Mortgage brokers can save you a lot of time and help manage your expectations. And they can have access to the whole mortgage market. There are many brokers. I recently refinanced one of my properties and I used They have a department and specifically deals with buy-to-let mortgages, and they provided a fantastic service.

And it didn't cost me a penny. Ok, they would have received the commission on the arrangement or product fee, or even a commission based on a percentage of the loan amount but I didn't have to pay anything from own pocket which was nice. And I wouldn't have received a bill at all if I hadn't have accepted and mortgage offer.

The interest rate I received was much better than the one I had before, and the arrangement fee was comparable to other lenders are used in the past. They also connected me with a solicitor to handle the transaction, who also free and it cost me a penny either. Happy days! They have lots of information, guides and calculators on their website and I'll place a link in the description below.

I also think they'll provide an incentive if you use my link as opposed to go into the website directly, but I'll clarify that and the description below. I was really happy with the service they provided, which is why I'm willing to recommend them on my website and this YouTube channel.

A question for you, are you ready to invest now, are you saving for a deposit, or are you considering whether a buy-to-let property is the right investment for you? Let me know in the comments below. Thanks for watching and I'll see you in the next video.

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