top of page
Search

How BTLS work

joelherbert-wright

Buy to let properties are houses that are let out to tenants. They are bought as business investments by both individuals and (Special Purpose Vehicles) SPVs specifically for this reason.


The BTLs are only looked at by the Lenders based on:

Rental income

Property value

Mortgage term


Unlike a residential property, the affordability is based on the rental income Vs the property value, rather than the ability for the mortgage client to make the payments.

Some lenders put a minimum income of £25,000 for the applicant, but not all.



The rental income is usually expected to be either 125% or 145% at a maximum, above the mortgage payments, at a stressed interest rate of around 5.5%.


This means, if interest rates went up to 5.5%, could the mortgage still be affordable and the payments still be paid.


They allow investors to make money from renting a property out, while paying down the mortgage over time. The other most used option is an interest only mortgage, where the mortgage is not paid down over time, only the interest is paid and the capital will be paid off the end of the term. Often Investors will borrow money against the property as the value increases and use the value at the end to clear the interest only balance, although this doesn't always work.


Always Wright Mortgages



0 views0 comments

Recent Posts

See All

Auction and short leaseholds

This makes sense, I deal in bridging weekly, but don't always see the short lease flats being bought often. If this is your strategy,...

Comments


Always Wright Mortgages Limited is an Appointed Representative of Connect IFA Limited 441505 which is Authorised and Regulated by the Financial Conduct Authority and is entered on the Financial Services Register (https://register.fca.org.uk/s/) under reference [Firm FCA Number] The FCA do not regulate some forms of Business Buy to Let Mortgages and Commercial Mortgages to Limited Companies.

 

Registered in England and Wales No: 12273176

Registered Address is: Unit 24, Highcroft Industrial Estate, Enterprise Rd, Horndean, Waterlooville PO8 0BT

 

The information contained within this website is subject on the UK regulatory regime and is therefore targeted at consumers based in the UK.

 

We are a credit broker and not a lender. We have access to an extensive range of lenders. Once we have assessed your needs, we will recommend a lender(s) that provides suitable products to meet your personal circumstances and requirements, though you are not obliged to take our advice or recommendation. Whichever lender we introduce you to, we will typically receive commission from them after completion of the transaction. The amount of commission we receive will normally be a fixed percentage of the amount you borrow from the lender. Commission paid to us may vary in amount depending on the lender and product. The lenders we work with pay commission at different rates. However, the amount of commission that we receive from a lender does not have an effect on the amount that you pay to that lender under your credit agreement.

 

Your property may be repossessed if you do not keep up repayments on your mortgage.

 

There will be a fee for mortgage advice, the precise amount will depend upon your circumstances. Your Consultant will confirm the amount before you choose to proceed but we estimate it to be £500.

We will receive commission from lenders. Different lenders pay different amounts depending on different commission models. For transparency we work with the following commission model: percentage of the amount you borrow. Further details of the commission model, calculation and amount will be disclosed to you throughout your customer journey.

Subscribe Form

Thanks for submitting!

  • Facebook
  • Twitter
  • LinkedIn


©2021 by Always Wright Mortgages. Proudly created with Wix.com

bottom of page