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Contact us
- Ratcliffe Mortgages
9 South Meade, Timperley - Altrincham, WA15 6QL
Telephone - 0161 969 9076 - Mobile- 07703 351628
- Fax- 0161 718 9195
Email - Bill@ratcliffe-mortgages.co.uk
Buy To Let* Bespoke Mortgage Services This sector of the market has, over the last couple of years, expanded out of all proportion. The majority of clients in this sector tend to be individuals. It is the opportunity to acquire one, or more, residential properties over and above the client’s main residence. Provided that the tenants, the type of property and the rental income are all acceptable, many lenders will advance monies to acquire “Buy to Let” properties. Theoretically, therefore, it is possible to buy a house and have the mortgage paid by the tenants. Consequently, apart from having to find the deposit, the house will cost the client nothing. At the end of the mortgage term, provided that the loan is cleared in full, there will be a substantial asset which can either be retained for future income - possibly to enhance one’s pension income - or sold for a lump sum. Lenders take different approaches. Some will base the mortgage on your income in addition to the amount of rent they estimate can be obtained. Others will base the loan purely on the rental. The formula they use will also vary. Typically a lender will require the rent to be at least 125% of the mortgage payment. Others will offer a three times salary multiple and half the rental income. Again, because of the tax implications, obtaining advice is necessary for those who are new to the market. Any interest you pay on a mortgage can be offset against tax, but capital payments cannot. This means it can make sense to have an interest only mortgage, even though these are often not viewed as favourably as repayment loans by the lenders. However, if you want the property primarily for capital growth and want the loan repaid by a certain time - when you retire, for example - then a repayment mortgage may be more appropriate. A lot of people take the risk of having interest only mortgages without a repayment vehicle in place to keep down the monthly costs. This is a decision you should think carefully about or take advice on. Buy-to-let mortgages are not regulated by the Financial Services Authority.
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