Investment Property
How To Get A Mortgage For An Investment Property In The UK
Getting a mortgage for an investment property is now very easy - if people seek expert advice. Figures from the Council of Mortgage Lenders show that the number of property investors has risen steadily over the past ten years and this growth is expected to continue in the near future. It seems there has never been a better time to get a mortgage for an investment property.
There are two reasons why it is so easy to get a mortgage for an investment property. The first is increased interest in property investment from people who might previously have hesitated. Driven by investors' success as seen on property programmes such as A Place In The Sun, many people are choosing to buy an investment property abroad or at home. People with children going to university may seek to obtain an investment mortgage so they can make sure that their children are adequately housed until they graduate. And still others plan to find a mortgage for an investment property in the hope of boosting their retirement income.
At the same time, there are more and more lenders offering property investment mortgages. When the Association of Residential Letting Agents (ARLA) started the BTL scheme ten years ago, there were only six lenders offering buy to let mortgages. Today, there are dozens of lenders and deals competing for landlords' property investment business, making it a good time to search for a mortgage.
First Steps with BTL Mortgages
So, where should a landlord start when seeking a mortgage for an investment property? Opinions on this differ. Some people advise landlords to find a suitable property and get advice on whether it will be easy to rent out before seeking a mortgage. Landlords should also investigate how much they might have to spend on refurbishment and renovation and should find out about potential rental income. There's no doubt that having those figures at hand will smooth the way when looking for a mortgage for an investment property.
However, some landlords may prefer to find a mortgage first, seeking agreement in principle. This means they will know in advance how much they can borrow and for what kind of property. This may save time and prevent landlords from considering unsuitable properties. One way of sourcing a mortgage for an investment property is to use a mortgage broker who has access to many of the BTL mortgage deals around. This can make the process of getting a mortgage much quicker.
Key issues to consider when obtaining a mortgage for a BTL investment property are the amount of deposit the landlord can provide, the lender's minimum age and income requirements and the potential rental income on the BTL property. It is worth thinking about this in advance so the answers are at hand when landlords try to get a mortgage for an investment property.
