*Quotes are subject to credit score, a minimum 20% deposit, HMRC (Inland Revenue) verifiable income, and market rent assessment.
If it wasn’t for Lak we would never have got the property. .
I have no hesitation recommending Lak Tamana and Associates.
When looking for a mortgage broker we initially went to another broker who confused and restricted our options. We then met Lak who simplified the process and gave us a more competitive deal in a timely manner to relieve pressure from agents and get the house of our dreams.
Many first time Buy to Let property buyers are daunted at the thought of arranging finance for their purchase.
Even existing landlords with an established property portfolio can sometimes be put off by the ins and outs of the Buy to Let mortgage market, as both market conditions and lender policies inevitably shift over time.
Taking out a Buy to Let mortgage for a property in Birmingham needn’t be intimidating.
However it's important to have a proper understanding about how they work and what to expect when you apply for one.
Particularly if this is your first step into the world of Buy to Let property ownership.
Many of us have at some point or other held a residential mortgage for our home, and it would be easy to assume that Buy to Let mortgages work in much the same way.
At the most basic level, they are very similar.
The lender gives you a loan to finance the purchase of the property, against which the lending is secured. Interest is charged on the amount borrowed, and you make a monthly payment to the lender to cover the interest charge.
In the event of defaulted payments, the security held against the property would allow the lender to repossess it.
So far, so similar.
However, Buy to Let mortgages represent a higher risk to lenders, not least because tenant arrears or periods where the property is vacant may affect the landlord’s ability to meet the mortgage payments.
Because of this higher risk factor, Buy to Let mortgages differ from residential mortgages both in terms of the application criteria, and in their pricing.
It’s an unfortunate but inescapable fact that you’ll pay more for a Buy to Let mortgage than you would for a comparable residential mortgage.
Arrangement fees are generally higher (sometimes considerably so) as are interest rates.
You should also expect to have to put down a larger deposit; usually a minimum of 20 per cent of the property value.
However a deposit of 25 per cent or more may be required to qualify for the better Buy to Let mortgage deals.
Another way in which Buy to Let mortgages differ from their residential counterparts is in the criteria lenders use to assess the mortgage application.
A residential mortgage application will usually take account of employment status, income and expenditure figures , as well as the usual credit reference checks.
But with Buy to Let, mortgage lenders will more often base their decisions on consideration of the property’s projected rental income.
Some lenders may use a combination of approaches, for example looking at the projected rent but also requiring the applicant to have a verifiable salary or income over a certain amount.
A common approach amongst Buy to Let lenders is to require the rental income to exceed the monthly interest-only mortgage payment by a certain percentage, typically 25%.
For example, if the interest-only mortgage payment is £500 a month, the minimum monthly rental income from the property would need to exceed £625 a month.
The lender may ask a local property surveyor to provide confirmation of a reasonable rental income figure for the property and area.
Rental yields in Birmingham are strong and present property investors with some excellent Buy to Let opportunities.
While the Birmingham property market may not have the pace and resilience seen in London’s thriving Buy to Let landscape, its location and demographics continue to attract canny investors.
Buy to let investors in Birmingham may see particular benefits from student letting.
The city is home to a number of universities, colleges and other educational institutions. It’s estimated that the city houses somewhere in excess of 60,000 students, including many from overseas.
There’s also the large number of young professionals who, in the current financial and property climate, are more likely to rent than they might have been in the past.
When looking for a Buy to Let mortgage it makes sense to use an expert, local mortgage broker like Lak Tamana & Associates to arrange the loan.
There are a number of specialist lenders offering Buy to Let mortgages that may give a better rate than you would find by approaching a high street bank or building society.
In fact, these types of deals are usually only available via intermediaries.
With over 25 years experience arranging Buy to Let mortgages for both new and existing landlords and property investors, you can be sure Lak and his colleagues will find the most suitable deal for your property purchase.
Get in touch with Lak Tamana & Associates today on 07973 748473 for a friendly chat and prompt BTL mortgage quote.
Or enter your details in our request a call back form. and they’ll call you back at a time slot convenient for you.
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YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT.