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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
Should I use a broker?
I am new to buy-to-let and in the process of looking for a mortgage. Is there any value in going to broker or would I be better of looking for a deal myself?
I am reluctant to use a broker as I am concerned about additional fees, yet I am also new to this and worried about making a mistake.
Answer
This is a tricky one to answer as I will clearly be biased! An independent broker will be able to access the whole mortgage market.
They will know which lenders would be willing to lend to you and will run the administrative process of your mortgage application.
With this in mind, I do believe that brokers bring real value to their clients. Most brokers will not charge for a consultation, nor for recommending a particular deal, (fees are normally charged on the receipt of a mortgage offer or completion) so there is no harm in speaking to a couple, seeing what they can offer and aligning this with what you have found directly. Then you can decide which would be best for you.
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Question
Airbnb property: Can I get a buy-to-let mortgage?
I would like to buy a ‘second home’ near the coast which I plan to let out on Airbnb for about 75% of the year and live in myself for the rest of the time – mainly school holidays.
Do I need a buy-to-let mortgage or is there a specialist loan I can get for this type of property? I will need a loan for about 70% of the property’s value and I have a small amount left to pay on my own residential mortgage.
Answer
Most lenders either want you to occupy the property yourself and not let it out (homeowner mortgage), or not live in the property (buy-to-let).
However, there are a couple of buy-to-let lenders who will allow you to let the property for the majority of the time and also accept that you will stay there yourself. Your best options would be to speak to a broker who will be able to steer you to the right lenders.
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Question
How do buy-to-let mortgages differ to residential?
I am currently looking around the market for a buy-to-let property as a way of boosting my income. I have an inheritance to use as a deposit but would still need a mortgage for around 50% of the value.
I have experience of getting residential mortgages as I am also a homeowner, are buy-to-let’s pretty similar or are there any differences I should know about before starting the process?
Answer
Buy-to-let mortgages are just the same as residential mortgages in terms of being able to get a fixed or variable rate, having interest-only and repayment as options, etc.
The actual application process is also very similar. The main difference is that generally when lenders are looking at the amount you can borrow, buy-to-let mortgages are focused on the rental income the property will achieve rather than your own personal income.
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Question
How much can we borrow?
My husband and I are looking into the prospect of using either buy-to-let or stock market investments to help boost our pension in the future. We are both aged 43 and work full-time. Our joint salaries are £83,000 and we currently have a mortgage with £150,000 remaining for which we are paying £890 per month.
We have around £22,000 in savings to put down for a deposit on a property. We have looked in our local area and we can afford to put down a deposit of 20% on a flat. Would we realistically be able to get a mortgage?
Answer
So yes, in principle this works perfectly! The lender will want to make sure that the rental income is sufficient to cover the mortgage interest payments with a surplus, but even if this doesn’t work out, as you have a large amount of surplus income each month, this could still work using what is called top-slicing.
Anyway, I am getting too far into the detail now – the short answer – yes, it sounds very realistic that you could get the mortgage!
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