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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
Remortgaging to expand my portfolio
I have a rental property which I have been letting now for three years. Things are going well and I am happy with the return on my investment so I am considering expanding.
Is it possible to remortgage my current residential property – the one I live in – to purchase another buy-to-let?
I own around 80% of my home so I have quite a bit of equity. Alternatively, could I remortgage my buy-to-let?
Answer
So yes, both options are a possibility – lenders are very open to borrowers taking extra funds to acquire investment property.
Based on the numbers you have shared, I do not think, on the face of it at least, that this should be any problem.
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Question
Buy-to-let affordability rules
I have been living abroad for a number of years and have returned home with plans to purchase a buy-to-let.
I understand things are little different in this market than they were when I left the UK five years ago! Friends are telling me the affordability rules are more strict now.
Can you please explain what lenders now look at when assessing potential borrowers?
Answer
Yes, it has certainly been a period of change! The way lenders determine how much you can borrow based on the rental income has become more stringent, although, the way lenders do this calculation has also become more complex, taking into account things like your tax code and the type of property affects which calculation they use.
To this end, I would suggest you get in touch with a mortgage broker who can take you through this.
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Question
Is buy-to-let an option for first-time buyers?
I am living with my parents and want to get onto the property ladder. Unfortunately, I live and work in London and don’t want to move from the capital because this is where my life is.
However, I am also extremely keen to get onto the first rung of the property ladder. I have had an idea that I could stay with my parents, enjoy my life in London, but buy a property in a part of the country where prices are cheaper so I can begin investing.
Can I get a buy-to-let mortgage for this purpose? I have calculated, in the area I would like to buy, I could afford to put down a deposit of about 40% of the price of a terraced house. Would any lenders consider me?
Answer
The very short answer is that yes, some lenders will lend to first-time buyers. The key is that (for most lenders) you need to be able to afford the mortgage as if it were you own home.
As long as this works, then you would be able to get a buy to let, even as a first time buyer.
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