Buy to let

The increase in the buy to let market has certainly not gone unnoticed. Many people see investing in a second or third property as a retirement plan and a way of investing in their future. The choice of mortgages within buy to let has become more extensive than in recent years, however there are differences when considering and assessing the most suitable mortgage for your individual requirements. Buy to Let mortgages are typically not regulated.

At LFP mortgage solutions we understand that landlords require certain conditions in conjunction with the best market rates. We have considerable expertise in this area and can give first time buy to let landlords some supporting advice. It is important that you understand the risks of buy to let before making these substantial financial decisions.

Lenders will calculate the amount you can borrow on a given property against the potential rental income and also the loan to value, i.e how much mortgage you are raising against the property value itself. Buy to let property is a serious investment and like all investments you may lose money if you encounter any periods of having no tenants, rent arrears or indeed absconders. You must also bear in mind the maintenance costs of running the property, together with personal tax implications. If you are totally satisfied with the risks and the nature of buy to let investing, the exercise can be very rewarding and potentially provide you with financial assistance in later life.

 Self certification mortgages

We see many clients who, for a variety of reasons, cannot demonstrate their exact income in the traditional sense. Clients who have, for example, a source of income from different occupations, maintenance payments or certain benefit and private income can present difficulties when applying for a mortgage loan. Certainly clients who have a bonus or commission structure can find that sourcing a suitable lender can be difficult. However, these scenarios do not mean that you will be excluded from raising money.

Lenders are aware of these circumstances and operate some flexibility, however generally speaking there will be certain conditions in the loan to value ratios. Many lenders are now moving towards an affordability system as a basis for lending, rather than the traditional three or four times salary. You must be aware though that declaring your own levels of income without supporting evidence must not be exaggerated as, naturally, you will run the risk of potentially not being able to meet these payments should interest rates rise or your circumstances worsen.

Exaggerating income is actually fraud, not just the issue of affordability.

Your home may be repossessed if you do not keep up repayments on your mortgage.