When purchasing a Buy to Let property for the first time you would normally need to be a current property owner. A couple of lenders so allow a Buy to Let for first time buyers also.
To outline some key points when purchasing a Buy to Let property:
- Deposit - Generally speaking, a deposit of 20-25% is required.
- Minimum Income – most lenders require a personal income as part of their criteria.
- Stamp Duty Land Tax – will be payable at the higher rate in most instances
- Mortgage Agreement in Principle – Most estate agents will require proof of this in the form of certificate which we will organise for you.
- Mortgage Property Valuation – this is required by the lenders to assess the value and anticipated rental income of the proposed property.
- Rental Income – most lending is based upon the rental income achieved/expected.
- Personal Income – can also be used to enhance the borrowing if the rental income is low. This is becoming increasingly important in the London market to maximise borrowing.
- Auction Properties – this can be done but note of caution the property must be in a lettable condition based upon the mortgage valuers comments. Normally a 10% deposit has to be paid and completion within 1 month, unless the mortgage is granted the deposit is at risk. Many landlords will buy with cash at auctions and refinance several months later.
- Bridging finance – this can be utilised if you need to buy quickly at auction and the property is in a condition where it cannot be let immediately. The idea is to use the bridging finance whilst the property is refurbished to a standard that it can be let, we would then replace this finance with a conventional Buy to Let mortgage.