MORTGAGES

BUY TO LET (BTL)

Buy to let mortgages are specifically designed for the purchase of property to rent out. They differ from residential home loans in a few key ways. For starters most BTL lenders will require a deposit of 25%, which is higher than some residential mortgages. They will also usually require the monthly rent received, to cover the monthly mortgage payments by 125%, for example, if the mortgage payment was £200 a month, they would require the rent received to be £250 a month.

It will also be necessary to prove that you have a minimum salary, this is usually £25,000 a year gross.

They are often taken out on an interest only basis where the borrower (you), pays the interest due on the loan each month, opposed to paying the interest and some repayments. This can be a difficult concept to understand, but interest only mortgages keep your monthly payments lower and your return higher.

TO NOTE

Buy to let mortgages are the only mortgages that should be used if you intend to rent out your property. There are serious consequences to using a residential home mortgage for a buy to let property. This activity could be mortgage fraud and if caught your lender could immediately revoke the mortgage or fine you. You may also as a result of this, struggle to get further mortgages in the future.

FIRST TIME BUYER BTL

Many of you will find yourself fitting into this niche category. You have the financial freedom to be able to invest in property, but as you have no need for a house to live in, you want your first purchase to be a buy to let.

Although the selection of lenders is smaller, there are still several very competitive products available for first time buyers looking to purchase a buy to let. Again, you will have to have a provable salary of at least £25,000, and the property will need to comply with the usual BTL conditions, but having successfully gone through this process before, we are perfectly placed to help you.

We have established relationships with excellent mortgage brokers who have dealt with crew in your exact position.

RESIDENTIAL

Residential home loans differ from BTL mortgages in a few key ways. They have one specific purpose, to help buy a home for you to live in. The deposits may be smaller but the loan amount is based on your salary, commonly you can borrow four and half times your annual earnings. It is more common for these to be repayment mortgages where each month, you pay interest on the loan and a small sum which goes towards paying off the debt. They will also require you to be earning a minimum salary.

It's also worth noting that lenders in these cases may scrutinise your bank statements and spending habits in much more detail, this can prove problematic for yacht crew in particular.

If you are looking to purchase a house in the UK which will be your primary residence and will not be rented out, then this is the mortgage for you.

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