Buy To Let & Let to Buy Mortgages

A Buy-to-let mortgage (also known as an Investment mortgage) is designed for borrowers who want to let out their property to a third party (i.e tenants)

More and more people are investing in property as a long term investment offering the potential of capital gain together with income stream in retirement.

When you take out a buy-to-let, you will be expected to meet certain criteria:-

·         Deposits required for buy-to-let mortgages are typically larger than those for a standard residential mortgage – it will typically be 20% – 25%.

·        Your expected rental Income must exceed your monthly mortgage repayment by a certain percentage. For example, your lender may require a rental income of 130% of your monthly mortgage payments.

·        The lender will also want to establish whether the property you are buying is a good long term investment and that your rental expectations are achievable.

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

Although Hoskin Mortgages / Hoskin Financial Planning are regulated by the Financial Conduct Authority (FCA), most buy-to-let mortgages are not.   

Let to Buy Mortgage (LTB):

This is a mortgage where the borrower’s current property is let to other tenants and the rental income is used to cover the mortgage repayments on a new property, bought as the borrower’s main residence. When Lenders calculate how large a loan the borrower can afford to repay on LTB they do so primarily on the basis of projected rental income, rather than salary income multiples.