Investment Mortgage Loan In UK
Lender Criteria For An Investment Mortgage Loan in UK Revealed!
When it comes to getting an investment mortgage loan in UK financial institutions, landlords will be judged on how well they meet the lenders' criteria. With an investment mortgage loan in UK banks and building societies, the criteria can be varied and most people should find a suitable lender.
Some of the criteria for an investment mortgage relates to age. There is usually a lower age limit, which is usually between 21 and 25. However, there is also an upper age limit, with many lenders specifying that the BTL loan must be repaid before the age of 65 or retirement age. Don't think that this rules you out of getting into BTL if you're approaching retirement, though, as many lenders are prepared to lend to much older people, provided they meet other criteria relating to income.
Other criteria for an investment mortgage loan in UK banks and building societies relate to employment. Landlords may need to show that they have been employed or self employed for up to a year and to give evidence of the income from their employment. There are many lenders who will lend to people who self certify their income, and many others who will waive this requirement if the deposit on the investment property is large enough. With an investment mortgage loan in UK financial institutions, there may also be criteria relating to the landlords status. Some lenders avoid first time landlords, preferring to opt for those with more experience, while others welcome them.
BTL Property Type
Another factor when deciding on an investment mortgage loan in UK financial institutions is the type of property the landlord is planning to buy. Former local authority houses, right to buy dwellings and student houses are only covered by a few lenders. Some lenders will not accept holiday lets or lets for family members. And the value of the property may also be an issue when sourcing an investment mortgage loan in UK building societies and banks, as there is usually a minimum property value that these institutions will lend on. It is also worth finding out about the size of the property portfolio that lenders find acceptable. Some lenders prefer to lend on a single property, while others will lend on 50 or more.
An investment mortgage must also take rental income into account. Indeed, this is a crucial factor for most lenders. Rental cover is the amount by which the rental income exceeds the interest to be repaid on the investment mortgage loan. This is usually around 125 per cent to 130 per cent, but can be as little as 100 per cent or as high as 135 per cent.
The difficulty for landlords is that there is no standard calculation for rental cover for an investment mortgage loan in UK banks and building societies. Each institution uses its own criteria related to a particular interest rate and calculation. This means that landlords must do their research to make sure that their expected rental income is in line with the market. There is no point in going to a lender who expects a rental cover that would require a rent that exceeds the market norm. These are the primary considerations for a landlord seeking an investment mortgage loan in UK building societies and banks.
