Our lending criteria
- Who do we lend to? - Private individuals who have been UK residents for the
past 2 years and currently own their home.
- Maximum % Loan - 75% of the purchase price or valuation, whichever is the
lower.
- Maximum Loan - £250,000 per property - up to £1,000,000 with no restriction
on the number of properties in the portfolio.
- Minimum Loan - £30,000 per property.
- Minimum Purchase Price / Valuation (whichever is the lower) - £75,000 per
property.
- Term - 5 - 25 years.
Letting terms
Properties must be let on an Assured Shorthold Tenancy for a maximum period
of 12 months. The property can only be let to a single household e.g.
individual, couple or family (excluding relatives).
Other types of tenancy may be considered on an individual basis:
- Company Lets
- Registered Housing Association or Local Authority Leases
Exclusions
- Letting for multi-occupancy
- Bedsits
- Properties with any commercial usage
- Student Lets
- Limited Companies
How much can I borrow?
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Rental
The monthly rent you receive from letting the mortgaged property should
not be less than:
- 100% of the mortgage payment at the product rate if the mortgage is
less than 50% of the purchase price or valuation (whichever is lower).
- 110% of the mortgage payment at the product rate if the mortgage is more
than 50% of the purchase price or valuation (whichever is lower).
- 120% of the mortgage payment at the product rate if you require to use
other income. (Please see below).
Note: We use this calculation to allow for other costs e.g. management
charges, maintenance costs and those periods when you may not have tenants
in the property.
You may wish the letting to be self financing, however, we may be able to
help you buy the right property by taking into account any surplus income,
after deducting any additional regular financial commitments you may have
e.g. other loans, child maintenance. Our general guidelines are set out below:
Income
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Under 85% Loan to Value
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4x your sole/joint salary
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4.5x your sole/joint salary
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Over 85% Loan to Value
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3.75x your sole/joint salary
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4.25x your sole/joint salary
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These figures are less the balance of your personal mortgage (annual income
will be reduced by any monthly commitments, in respect of other loans or maintenance).
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How do I apply?
When applying for a Buy to Let Mortgage with us, we will require additional
information to support your application. It would be useful if you could have
available or bring with you the following documents in order to speed up the
process:
- Confirmation of the anticipated rental income from a recognised Letting
Agent
- your last 3 months pay slips and latest P60, or if you are self employed,
your last 3 years audited accounts/tax assessments
- your last 3 months Bank Statements
- Passport or full Driving Licence
- if you already have a mortgage, your most recent annual statement
How much will it cost me?
This will depend on how much you borrow and will be detailed in
the personalised illustration we provide when discussing your mortgage
requirements with you. This document will also include other fees payable with
your mortgage application.
You may need to pay a valuation fee and, should you choose one of our Fixed
Rate products, you may also have to pay a Reservation Fee - both are payable
with your application.
You will also need to pay a Product Fee which is an administration fee for
processing your mortgage - this is payable on completion and will be deducted
from your mortgage, unless you wish to pay it separately in advance.
Other associated costs you will need to consider are:
- solicitors fees
- stamp duty
- management costs and letting agency fees
- estate agents costs
- homebuyers or full structural survey fee
- possible disputes with tenants, which might result in non-payment of rent,
bills for damage and maintenance costs
- buildings insurance/rental and legal expenses cover
- maintenance costs
- service charges and ground rents, if the property is leasehold
It is advisable to ensure that the rent will cover the mortgage payments and
other ongoing costs, remembering to allow for possible void periods (periods
when the property may not be let).
Management of the property
This can be carried out by a suitable Letting Agent, unless you have
experience of managing your own property portfolio. The Agent will:
- have experience of local market demands, the letting potential and the
range of rent that can be achieved in current local market conditions.
- be able to advise on your rights and responsibilities and those of any
tenant.
- advise you on the compliance issues relative to Safety Regulations and the
need, if necessary, for re-decoration and new fixtures and fittings, which
will help to attract good tenants and reduce the risk of lengthy void
periods.
Solicitors fees
Please refer to the Mortgage guide
Having the property surveyed
Please refer to the Mortgage guide
Can I take a mortgage on any property?
Please refer to the Mortgage guide
Repaying your mortgage
Please refer to the Mortgage guide
Early Repayment Charge (ERC)
Please refer to the Mortgage guide
Anything else I should know?
Taxation
It is your responsibility to seek expert advice on your
overall tax position, potential liabilities and the procedures to be followed to
satisfy the Inland Revenue.
Is it necessary to comply with any other regulations?
Regulations are constantly changing, particularly with regard to
safety. Currently these cover fire safety, gas and electrical installations. You
should ask your agent to provide clarification and advice regarding compliance
with all of these important regulations.
This information is for guidance only
and is not intended to provide definitive information on every aspect of Buying
to Let. Further information can be obtained from one of the recognised letting
agencies e.g. ARLA (Association of Residential Letting Agents) or the RICS (Royal
Institute of Chartered Surveyors.)
We cannot offer any advice with regard to
either a proposed purchase or the viability of any prospective letting you may
be considering, only the mortgage itself. Responsibility for the financial
decision to 'Buy to Let' must rest with you.
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Interest
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