Property Investors have plenty of options when choosing to purchase their first, second or even multiple buy-to-let properties. However your standard buy-to-let purchase will typically be completed in your own personal name(s). Mortgage lenders will not use the conventional residential mortgage approach with affordability, when assessing the mortgage loan size. Instead, they will look at an applicants tax band (basic, higher, additional rate) as well as the monthly gross rental income that property can achieve. Where the loan size is falling short on a standard buy-to-let mortgage application, some lender’s will choose to use a term known as ‘Topslicing’. Topslicing is where the monthly gross rental income does not meet the affordability requirements for the mortgage loan size requested, the mortgage lender will assess your personal circumstances (income, expenditure, credit history) to see if the mortgage loan would still be financially sustainable, kind of like a residential mortgage affordability approach. Understanding buy-to-let mortgages and the way they work can be confusing and like all investments, you will want to make the best returns you can on your investment! Speak with an Ernest Henry Mortgages specialist today by selecting ‘Contact Us’. *Buy-to-let mortgages typically require a 25% deposit of the properties value as a minimum.

There is a lot of criteria required to obtain a buy-to-let mortgage. Being a first time property investor/landlord will mean that not all mortgage lenders will be willing to provide mortgage finance for buy-to-let borrowing. They will tend to look at other criteria to ensure the proposal is sustainable. This criteria may be that you need to own your own home! It may well be that you need to have a minimum earned income! No one mortgage lender is the same which opens up endless opportunities for our clients. We will also allow you to understand all associated cost’s with the transaction. *Please note that we do not provide tax advice at any stage throughout the transaction. Contact us today for your First Time Investment needs.

Some clients wish to purchase a buy-to-let property under a Limited Company name, where the Limited Company is usually set up for the only purpose of acting as an (SPV) otherwise known as a Special Purpose Vehicle. Sometimes, this limited company can be already trading for different purposes but may reduce your access to multiple lenders. The correct SIC Codes are required to be named on the Limited Company depending on the lender you wish to proceed with. Unlike Standard buy-to-let properties a Limited Company buy-to-let will not be owned in your personal name, whereas the company will have full ownership. This can require you or multiple parties being named as directors on the Limited Company. Speak to an Ernest Henry Mortgages specialist for more information around Limited Company buy-to-lets.

Unlike the majority of buy-to-let transactions which are not regulated by the Financial Conduct Authority, Consumer buy-to-lets are regulated by the Financial Conduct Authority. A common example of a Consumer buy-to-let is what is called a ‘Let-to-buy’ transaction. This is where you remortgage your main residence into a buy-to-let *sometimes raising funds out of the properties equity* to purchase a new residential home elsewhere. There are more reasons your transaction may fall under the Consumer buy-to-let criteria therefore please contact us here to discuss your buy-to-let needs.

Portfolio Landlord’s are defined differently across different lenders. For example with one lender it may well be that if you own 4 or more buy-to-let properties you are considered a Portfolio Landlord. When submitting a mortgage application for a Portfolio Landlord buy-to-let, lenders will typically assess the profit from the entire portfolio, as well as assessing the individual property itself. They will tend to limit the numeric value of borrowing that one particular lender holds within that portfolio or choose to limit the number of properties mortgaged by any one particular lender within the portfolio. The majority of buy-to-let lenders that provide Portfolio Landlord mortgages will have a simplified assessment/calculator that we can use to assess if they will provide you a mortgage. Here at Ernest Henry Mortgages we do not only take care of your entire portfolio, however it comes at no cost to you when trying to make a healthy investment.

House in Multiple Occupation (HMO’s) are assessed differently from your average buy-to-let property. However like a Portfolio Landlord they will be defined differently by different lenders. Sometimes it may well be by the number of rooms a HMO property holds or the number of people living within that property. HMO properties usually have communal areas such as shared kitchens and will show characteristics such as locks on doors. Mortgage assessment’s are completed based on the Gross Monthly Rent Per Room instead of the entire properties rental assessment. A typical example of a HMO Property would be Student Accommodation for Universities. There is often a lot of caveats with HMO mortgages so speak with a member of the Ernest Henry Family now to understand this in more detail.

Multi Unit Blocks or sometimes known as Multi Unit Freehold Blocks (MUFB) is typically where a client owns a freehold, with the units (apartments) held within those blocks are also held within the Freehold under one title. It may well be that the client owns the freehold of the block, with the units (apartments) within block are all on Leasehold titles owned also by the client. The only difference is that there is no legal entity. Lending is these situations can be tricky and come with multiple caveats from mortgage lenders. Lucky for you we have a lot of experience in these situations.