Buy to let mortgage broker in Leeds
In terms of investment, property is still seen as a prudent and worthwhile place to put your money. Especially for the long to medium term. And it's not purely the domain of the wealthy. Many people in Leeds have invested in property via a buy to let mortgage.
There are two main reasons why investment property buying can work. The first is the long term capital gain of increasing equity over time. The second is the potential profit from rental income.
As we know there was a general fall in house prices following the financial crisis of 2008. However in real terms they only fell back by around 15% to 20% on average in Leeds. Since 2010 house prices have in the main leveled out and whilst there is no guarantee, it is not unreasonable to expect a steady increase over the next say 15 to 20 years. Furthermore there has been a marked increase in demand for rental properties from tenants in Leeds over recent years - making buy to let even more popular.
Profit from rental income can be gained if a) you have a tenant (of course) and b) the monthly mortgage payments are less than the rent. For the lender this is an important aspect of the buy to let mortgage. Most have it built into their criteria that the rental income must be at least 125% in excess of the mortgage payments. The level of rent expected is determined by either the surveyor when he values the property or the actual rent if there is a sitting tenant. The mortgage lenders like to see this 'buffer zone' as it can help to cover expenses, rises in interest rates and periods of no tenancy.
Buy to let mortgages normally have a loan to value maximum of 75% but it is now possible to borrow 80% with some lending institutions. The normal criteria of status remain the same in terms of the borrowers credit worthiness and in some cases the lender will ask for a minimum amount of personal income to be shown (but not all).
Buy to let mortgage can be also be arranged in a limited companies name but this option has become less popular over recent years.
If you have a property portfolio you wish to remortgage - please get in touch.
BMV or below market value properties are a popular way of acquiring investments properties with little or no cash provided on the part of the buyer. They work by utilizing the equity in the BMV property to obtain a buy to let mortgage with a reduced cash deposit. This system often involves bridging finance to buy the property in the first instance an you often have to own the property for 6 months before you can remortgage. Please call us for more details.
Please note buy to let mortgages are not regulated by the Financial Conduct Authority.