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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk
Tel: 0345 345 6788
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Question
Do I qualify for an HMO mortgage?
Will I need a specialist buy-to-let mortgage if I am considering renting out my property as a house share? And will I also need to provide a bigger deposit or any additional documentation when making my application? This is my first foray into buy-to-let and I am considering my options, but am keen to pursue the HMO route if possible so would be interested in finding out whether it’s going to be more of a headache. Thank you in advance.
Answer
I’m afraid you will struggle to get a buy to let mortgage for an HMO as most lenders prefer borrowers to have at least one year’s experience as a landlord before they will give you a mortgage for an HMO. This is because HMOs are more complex and time-consuming to run.
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Question
Will my mortgage lender let me rent out my home?
My wife and I will be relocating for work next year to the USA on a one-year secondment. We would like to rent out our house, for which we currently have a mortgage. Do we need to transfer our residential mortgage to a buy-to-let and, if so, how easy will this be? We currently have about 18-months left on a five-year fixed rate so will have around a year remaining when we move.
Answer
As you are only intending to rent your property out for a year, you should ask your lender for “consent to let” which means you will be able to continue with your existing mortgage.
If permission is not granted, I’m afraid you will have to refinance onto a buy to let mortgage and pay any Early Repayment Charges (ERCs) on your current mortgage. When refinancing your home onto a buy-to-let mortgage, most lenders operating in this niche area prefer borrowers to have an onward purchase – as you won’t, do get in touch if you need help finding a solution.
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Question
How many people can go on a buy to let mortgage application?
My daughter, son-in-law and I would like to purchase a buy-to-let property together. I have my own home which I own outright and my daughter has a mortgage on her house with her husband. She is due to sell a flat she has been renting out and is hoping to use the equity, along with my savings, to put towards a house for which we would like to be joint landlords. Is it possible to get a joint buy-to-let mortgage and what is the minimum deposit we would need? Currently we have around 35% to 40%. Are there any restrictions on mortgages with three borrowers?
Answer
Many buy-to-let lenders allow up to four applicants on the mortgage so the three of you should be fine. Typically, the minimum deposit is around 20% to 25%. With 35% to 40% you have plenty which means you should be able to secure a better rate. Do make sure you all do lots of research and take financial advice before proceeding, particularly as there are new income tax rules for landlords to consider which could impact your investment strategy. If you would like help in sourcing the right buy-to-let mortgage, do get in touch.
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Question
Can I get a buy to let mortgage if I’m self-employed?
Can I get buy-to-let mortgage if I am self-employed? I am an electrician and business is doing very well at the moment so I want to invest some of my money into bricks and mortar. However, because earnings on a month-to-month basis can be irregular I would like some advice before I pursue the idea seriously. I am looking to purchase a two-bedroom flat worth £320k in a very up-and-coming part of Greater London and would need a 70% LTV mortgage.
Answer
If you are self-employed, most lenders will ask for two years’ accounts to check that your income is strong enough. A few only require one year’s worth. Talk to your accountant about the best route for investing – either personally or through a limited company. If you go down the company route, there are more options for Special Purpose Vehicle limited companies but if you trade as an electrician through a limited company, we have lenders that will lend to your business too although the rates tend to be a bit higher. Once you have talked to you accountant, talk to us!
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