Investment Mortgage Lender
Investment Mortgage Lender | The Questions They Will Ask You!
When a landlord approaches an investment mortgage lender for a BTL mortgage, the investment mortgage lender will want to be sure that the landlord has given adequate thought to the forthcoming property investment. This will help to reassure the lenders that the property investment will be sound and will bring a good return for both parties.
One of the first things a mortgage lender will want to know is that the landlord is not thinking of BTL as a short term, get rich quick scheme. In fact, the opposite is true. Buy to let should be seen as a medium to long term investment, so landlords should be prepared to have their capital tied up for quite some time.
An investment mortgage lender will also consider the location of the property. In particular, the investment loan lender will want to know that it is located in an area with strong rental potential and that it will appeal to people looking to rent a property. One way of setting the lender's mind at rest on this point is to consult a professional letting agent. The letting agent will have an in-depth knowledge of the local rental market. In fact, it may be advisable to go to a letting agent before going to an investment mortgage lender, as the agent can advise landlords on the investment potential of certain properties.
Landlords will also have to show the mortgage lender that they have thought about who will rent the property? Is the property for young professionals, students pursuing professional studies, other students or particular professions? This information is available from local letting agents. Having that information will reassure an investment mortgage lender that landlords have done their homework.
Assessing BTL Rental Value
A key question asked by lenders is how much you intend to rent the property for. This will provide the rental value, which is a key calculation used by a mortgage lender to determine how much to lend a landlord. Again, landlords should seek professional advice on property rental values. 
They can also look at advertisements in local papers to get an initial idea of rental values for similar properties.
An investment mortgage lender may ask landlords to have an assured shorthold tenancy (AST), which is a tenancy agreement with protection for both landlords and tenants. The agreement typically lasts for six months. Landlords will need to find out about what an AST involves and what legal liabilities they will have as a result.
Most of all, an investment mortgage lender will want to see that landlords have a realistic approach to becoming property investors. This means that they should have finance in place in case letting the property takes a little longer than anticipated and should be aware of the possibility of a short term decline in property values. They will be aware of the cost of letting agents and the cost of refurbishing the property. A landlord who is armed with this information is likely to get favourable treatment from an investment mortgage lender.
