Mortgage Types
Our expert Advisers have experience in all areas - explore all available Mortgage Types below.
The Financial Conduct Authority does not regulate some forms of Buy To Lets. Your property may be repossessed if you do not keep up repayments on your mortgage.
Setting up a limited company SPV (special purpose vehicle) is easy to do and can have serious tax advantages although this is something best discussed with a tax adviser. The main benefits include:
Mortgage interest relief is where you can offset all the mortgage interest, and other finance costs such as arrangement fees against profits from the rental income before paying corporation tax.
Growing your portfolio might be your goal. If you intend on doing this and you don't need to draw much income from the rent, then this structure may be advantageous in the long run.
Planning for your family might be easier with an SPV in place. Passing on your property portfolio can be easier and more cost effective through transfer of shares.
Borrowing capability tends to be better when purchasing through a limited company. This is because there are less rules that the lenders need to follow, allowing for more favourable ‘stress tests’ which translates to better borrowing power. It's worth noting that not all lenders offer limited company applications and oftentimes these deals tend to be more expensive.
With the rise of Airbnb, holiday lets are becoming very popular in recent years. Lenders have started releasing products that better cater to this market.
You’ll have a tough time finding a high street lender that will offer holiday let mortgages. Their processes will not allow them to tap into this market due to the underwriting assessments in place. This is mainly because the high street banks use one fixed rental income figure as an estimate of the profitability of the property, whereas with holiday lets, as you can imagine, the rental income is very much variable/seasonal.
Generally lenders will require a minimum deposit of 30%. How much you can borrow will depend on the rental income achievable and the property value and location.
Move home without selling your property with a let to buy mortgage. Oftentimes home-movers will choose to retain their existing property as an investment and refinance it as a rental property.
Another benefit here is that you will not need to sell your property to buy, meaning you're a chain free buyer which can be appealing to sellers and agents.
As this is a double transaction it's a good idea to seek mortgage advice to make sure you meet both lenders criteria to avoid any nasty surprises later on in the process.
A landlord that owns 4 or more buy-to-let properties is considered a portfolio landlord. This can make it more challenging to secure a mortgage because lenders will review and evaluate your background portfolio to make sure it meets their stress test criteria. Some lenders will also restrict the total number of properties you have in the background so that is something to consider.
Busy experienced landlords and property developers want to get things right from the start to avoid any nasty surprises down the line. They prefer not to chase a slightly cheaper deal if it means delays and added costs in the long run.
Portfolio landlords face several challenges such as:
Changing regulations portfolio landlords must keep up with changing regulations and laws, such as tax changes and mortgage rules.
Managing multiple properties can be time consuming and require a lot of resources such as managing tenants, arrears and maintenance.
Financing mortgages start to become more difficult especially if the portfolio is large.
A good mortgage adviser will be able to take all the above into account and will proactively review the landlord's portfolio to ensure it is always kept up to date, freeing the landlord to explore further opportunities.
Your home/property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
If you’re a first time buyer you may be able to buy a home for 30% to 50% less than the market value. The home can be:
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a new home built by a developer
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a home you buy from someone else who originally bought it as part of the scheme
The First Homes scheme is only available in England.
In order to qualify you must:
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be able to get a mortgage for at least half the price of the home
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be buying the home as part of a household here total income is no more than £80,000 or £90,000 if you live in London
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Homes in London cannot exceed £420,000 after the discount, while elsewhere in England, the limit is £250,000. If you want to learn more about the first home scheme then just give us a call.
This scheme allows the majority of council tenants to buy their council home at a discount.
You can purchase jointly with up to 3 family members as long as they have lived with you the last 12 months.
Even though your home is no longer owned by the council, you may still have the right to buy. This is called ‘preserved to buy’. If you would like to learn more about the right to buy then give us a call and one of our team will be able to help you.
Bad credit can come in several forms but remember, different lenders will have different criteria for lending money, some lenders will treat you more favourably than others. A good mortgage adviser will be able to find the right deal for you and advise on steps you can take to improve your credit for mortgage purposes. Whether you have defaults, missed payments, CCJs or debt management plans in the background, there often is a solution out there for you.
CCJs - The reason, as well as the amount, the date it was registered, and whether or not it's been satisfied are all factors that can help your mortgage adviser find the most appropriate solution for you.
Defaults & Missed credit commitments are also something to consider. The amount and the dates can all affect finding the right mortgage solution.
Debt management plans in the background can make it tough to secure a mortgage. In this instance you are looking mostly at specialist lenders and most will require the debt management plans to be satisfied.
Find out how you can improve your overall credit here: LINK TO ARTICLE
As a first time buyer the mortgage process is the same but there are some benefits outlined below:
You’re chain free meaning you don’t have a home to sell before buying. Having to sell your existing home first can really delay the home buying process, therefore being a first time buyer can appeal more to sellers and agents who need to sell fast.
Special schemes are available to first time buyers. These include ‘first home scheme’, ‘shared ownerships’ and ‘right to buy’ that aren't available to anyone else.
This option is available to first time buyers who cannot afford the full deposit or mortgage payments for a home.
With shared ownership you buy a share of a property and pay rent to the landlord on the rest. You can buy between 10% and 75% of the home's market value. You can take out a mortgage to buy your share or pay for it with savings.
You’ll also need to pay a deposit, usually between 5% and 10% of the share you’re buying.
You can buy more shares in your home in the future. This is known as ‘staircasing’. If you buy more shares, you’ll pay less rent. The amount of rent you pay will be based on the landlord’s share.
The term foreign national applies to non-UK passport holders. When it comes to getting a mortgage for people on visas there are several things to consider.
Time in the UK is the first thing to consider. Most lenders will require at least 2 years residency.
Type of visa is another factor. Whether it's a tier 1 or2 visa, work visa, spousal visa or something else your mortgage adviser will be able to determine the right lender. The time left on the visa is also important to note as some lenders require a minimum of 2 years remaining.
Deposit amount required can vary from lender to lender. whilst most lenders require a minimum of 25% deposit, there are lenders that can accept as little as 5%. The deposit requirements will vary depending on the above two points
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