Your Free Guide to Buy-to-Let Mortgages. FREE Buy-to-Let Mortgage Advice. Phillip Cartwright Managing Director

Transcription

1 Your Free Guide to Buy-to-Let Mortgages FREE Buy-to-Let Mortgage Advice Freephone Phillip Cartwright Managing Director

2 Buy-To-Let Mortgage Guide

3 CONTENTS Independence and integrity Introduction Is buy to let for you? How much can you borrow? What sort of property to buy What type of mortgage should you choose? How to get the best buy-to-let mortgage Your responsibility as a landlord Tenants rights and responsibilities 2

4 FoREwoRD Independence and integrity This guide is written with absolute editorial independence 1

5 ChAPtER 1 Introduction 2

6 ChAPtER 2 Is buy to let for you? But there are risks... warning! there s no protection. Finding the right tenants. Can t sell. Other hurdles... Finding the right property. Fixing property problems. Stress. 3

7 ChAPtER 2 Martin s Mortgage Moment Is buy to let worth it? Just like buying shares, investing in property is about risk. 4

8 ChAPtER 3 How much can you borrow? 1. You can only borrow 75% of the property s value. 2. You need to yield a rental income that would cover 125% of your mortgage payments. after 5

9 ChAPtER 3 here are other factors lenders will look at: You must be a homeowner. You must earn at least 25,000 a year. You must have a good credit score. 6

10 ChAPtER 3 You can t borrow to raise the deposit. You can t be too old. there are big fees to pay. Interest rates are higher. You must buy the right type of place. NEVER try to buy to let with a normal mortgage 7

11 ChAPtER 3 Martin s Mortgage Moment You need to understand gearing when you gear, you magnify everything Scenario 1: The house price increases to 150,000 8

12 ChAPtER 3 Scenario 2: The house price drops to 75,000 These kinds of complicated, highly-geared deals should only be risked by experienced investors who know what they re taking on. 9

13 ChAPtER 4 Can you afford it? 200,000 the deposit. at least 50,000 the mortgage arrangement fees. 2,000 Stamp duty. 1,500 1,100 Legal fees, valuation and survey. 2,000 to 2,500 Insurance ,000 10

14 ChAPtER 4 Other costs to take into account how much are letting agent fees? taxes Income tax your Capital gains tax 11

15 ChAPtER 4 What expenses can I deduct from my earnings? Example 12

16 ChAPtER 5 What sort of property to buy 13

17 ChAPtER 5 Think about what tenants want 14

18 ChAPtER 5 Know the area Don t pay more than it s worth Is it worth buying a wreck and doing it up? 15

19 ChAPtER 5 Lenders are fussy about the property 16

20 ChAPtER 6 What type of mortgage should you choose? Choice 1: Repayment mortgage or interest-only? Interest-only Repayment mortgage 17

21 ChAPtER 6 So which should you go for? have 18

22 ChAPtER 6 Choice 2: Do you want a fixed or a variable rate mortgage? Fixed-rate mortgages PROS & CONS OF FIXED RATES PRoS CoNS 19

23 ChAPtER 6 Variable rate mortgages 1. trackers 20

24 ChAPtER 6 PROS & CONS OF TRACKERS PRoS CoNS 21

25 ChAPtER 6 2. Standard variable rates (SVRs) PROS & CONS OF SVRs PRoS CoNS The most important thing to understand with SVRs is that lenders can and sometimes do move the rate, hiking people s costs. 22

26 ChAPtER 6 Be canny. Check the SVR too to make sure you re getting the best rate. 3. Discount rates PROS & CONS OF DISCOUNTED RATES PRoS CoNS 23

27 ChAPtER 6 4. A hybrid option capped deals PROS & CONS OF CAPPED DEALS PRoS CoNS 24

28 ChAPtER 6 Questions to ask Are there any extended redemption penalties? Does the lender charge daily interest? What happens if I need to sell the property during the fixed or the discount deal? 25

29 ChAPtER 7 How to get the best buy-to-let mortgage Step 1: Gather your paperwork Before you start, gather everything you could possibly need. 26

30 ChAPtER 7 Step 2: Find a mortgage broker 27

31 ChAPtER 7 Pick one who also does residential mortgages. Ask if it checks all lenders. Ask how much it charges. Receiving a procuration fee from the lender Charging you a broker fee 28

32 ChAPtER t Martin s Mortgage Moment Mortgage brokers can make it easier and faster 29

33 ChAPtER 7 Step 3: Check direct-only deals

34 ChAPtER 8 Your responsibility as a landlord Tenancy contracts Deposit schemes 1. Custodial schemes 31

35 ChAPtER 8 2. Insurance schemes 32

36 ChAPtER 8 Keeping it safe Get any gas appliances checked once a year by a Gas Saferegistered tradesman. 33

37 ChAPtER 8 Letting agents Visiting your property There have been nightmare stories of tenants holding wild raves. 34

38 ChAPtER 9 Tenants rights and responsibilities 35

39 ChAPtER 9 Martin s Mortgage Moment Happy Hunting we hope you save some money. 36

40 ChAPtER

41 ChAPtER 9 38