Are you looking forward to buying property this year? Well, having a mortgage is one of the ways you can finance your home buying. A Buy-to-let (BTL) mortgage is a financial vehicle you can use if you want to buy a property to rent.

Whether you are looking for a holiday let or rent property short-term, a mortgage may still be valid. Most lenders tend to offer BTL mortgages on an interest basis, while others prefer capital and interest options. When you apply for a BTL mortgage, the monthly installments will be lower. You need to plan how to repay a capital element at the end of the term.

Most landlords that opt for capital BTL mortgages pay off the capital element by allowing for profit on the rental income on the property at some point where the loan is almost ending. The amount you borrow as a mortgage will be based on rental income. You can quickly determine your mortgage payments using a mortgage calculator.

To handle these mortgages you should consider a property lawyer to look after this. You can choose AVRillo conveyancing lawyer in Oldham is one of the best service providers in the UK.

What You Should Know When Applying For A Mortgage 

Most lenders consider borrowing money to purchase a BTL a high risk. These are some points you should keep in mind when calling your lender for a buy-to-let mortgage.

1. The minimum deposit for getting a BTL Expert Mortgage Assistance is usually between 20-25%
2. Most mortgage lenders will want to see rental yields between 125-145% of the BTL mortgage payments. The mortgage affordability checks usually are based on the rental income the property can achieve over the mortgage repayments.
3. The interest rate and the arrangement fees for the BTL mortgage are higher than the residential mortgages.
4. There is an additional 3% stamp duty surcharge that you will pay if you already own a property.
5. You need comprehensive insurance coverage when you buy a rental property.
6. Most lenders will check your personal income to bridge the gap between mortgage payments and the rental yield. This is known as top slicing.
7. You need a positive credit score to qualify for a BTL mortgage. Most lenders will check your credit history before proceeding with the application process.

How to Get a BTL Mortgage 

You can follow these three steps when applying for a BTL mortgage

• Research: Focus more on finding a property with the best return, like student rental. You also want to ensure the property you buy is found in an ideal location.
• Hire an experienced broker: When applying for a mortgage, you must hire an experienced mortgage broker. They will provide you with the vital information you need on BTL mortgages and take you through the application process.
• Apply: After researching and reaching out to a broker, you can apply for the BTL mortgage. Your mortgage broker will match you with the best lender and manage the application process from start to finish.

Final Thoughts 

You need a BTL mortgage when buying a rental property. Therefore, you should hire an expert mortgage broker in your location to help you in the process.