Buy-to-Let Mortgage Broker
Looking to expand your property portfolio or purchase your first rental property? At Henry Dannell, we specialise in helping you secure the most favourable buy-to-let mortgage solutions tailored to your specific goals. Whether you’re an experienced landlord with a portfolio or a first-time landlord, we are here to guide you every step of the way.
Please note: this is a long term investment which you hope will generate rental income along the way and a profit when you sell the property, but bear in mind that if you need access to some cash, a property can take time to sell or remortgage. If house prices fall, you might not be able to sell for as much as you had hoped. You would have to make up the difference if the property sold for less than you owe – a risk that increases, the higher the percentage you borrow. If you sell for a profit, you may have to pay capital gains tax. Don’t forget that with a variable rate mortgage, your costs will rise if interest rates go up. This would eat into, or even wipe out, your income and profit. It is recommended that you also maintain access to emergency funds to cover your mortgage payments during ‘void periods’ that may arise whilst you have no tenant and the property is not let.
Introduction to Buy-to-Let Mortgages
What is a Buy-to-Let Mortgage?
A buy-to-let mortgage is a loan designed specifically for individuals looking to purchase property to rent out to tenants. Unlike residential mortgages, the affordability model for buy-to-let mortgages is typically based on the rental value of the property These mortgages often have different lending criteria making it essential to obtain the right advice.
Benefits of Using a Specialist Buy-to-Let Mortgage Broker
Securing a buy-to-let mortgage can be complex, which is why using a specialist broker offers distinct advantages:
- Access to the Right Lenders: As a specialist broker, we have access to a wide range of mortgage lenders, including specialist lenders, and exclusive mortgage products that are not always available to the general public.
- Tailored Solutions: We focus on understanding your unique circumstances, financial requirements, and borrowing needs to structure your debt effectively, ensuring you can secure the necessary amount to achieve your plans.
- Expert Guidance: Our brokers have in-depth knowledge of the market, staying current with lender criteria, evolving regulations, and industry trends. Our expertise allows us to secure the most suitable and competitive terms.
- Strong Industry Relationships: Our expert team works seamlessly within the industry ecosystem, leveraging close relationships with lenders, valuers, and solicitors. These connections enable us to go beyond just securing the mortgage, ensuring every aspect of your needs are addressed efficiently and effectively.
- Smooth Lending Experience: We take a proactive approach, working closely with underwriters to navigate the details of your application and secure swift approvals. By managing communication with all parties involved, we ensure a quick offer and streamlined completion, delivering a smooth and stress-free experience.
Types of Buy-to-Let Mortgages
We provide a variety of buy-to-let mortgage options to meet different investment needs.
Standard Buy-to-Let Mortgages
Perfect for individuals looking to purchase or refinance a single rental property. This type of mortgage is based primarily on the rental income, but some lenders may also take personal income into account.
Consumer Buy-to-Let Mortgages
A Consumer Buy-to-Let (BTL) mortgage is a type of mortgage designed for individuals who did not initially purchase a property with the intention of letting it out but have subsequently decided to rent it out due to personal circumstances. It is regulated differently from traditional BTL mortgages as it is considered closer to a consumer credit product.
Limited Company Buy-to-Let Mortgages
For landlords holding multiple properties, buying/refinancing through a limited company is often more tax-efficient. We can advise on the most suitable mortgage options for limited companies, helping you make the most of the tax benefits and protections that come with this approach.
HMO (House in Multiple Occupation) Mortgages
HMOs require specialist mortgage products and advice due to the complexity of managing multiple tenants in one property. as Additionally, each lender will define a HMO differently. Whether you’re buying your first HMO or expanding your portfolio, we can help you navigate this unique market.
MUFB (Multi-Unit Freehold Block) Mortgages
A Multi-Unit Freehold Block (MUFB) Mortgage is a specialised type of mortgage tailored for properties comprising multiple self-contained units under a single freehold title. These units, such as flats within a single building, are owned collectively under one freehold ownership. Each self-contained unit typically operates under a separate tenancy agreement.
Exploring the Method of Using a Limited Company for a Buy-to-let Mortgage
Investing in buy-to-let properties through a limited company is an increasingly popular strategy among landlords in the UK, mainly due to the tax advantages and financial flexibility it can provide. However, the process can be more complex than traditional buy-to-let investments in personal ownership, making the guidance of a specialist buy-to-let mortgage broker essential.
Advantages of Using a Limited Company for Buy-to-Let Mortgages
- Tax Efficiency: A primary reason for purchasing buy-to-let properties through a limited company is to take advantage of a more favourable tax structure. Unlike personal ownership, which incurs income tax on rental profits, limited companies are taxed at the corporation tax rate. Additionally, landlords owning property through a company can offset mortgage interest as an expense against rental income, which is no longer an option for individual landlords due to tax reforms.
- Inheritance Planning: For those looking to include property in their estate, holding buy-to-let properties in this corporate structure can simplify the inheritance process. Shares in the company can be transferred as part of an estate plan.
- Reinvestment Opportunities: Holding property within a company structure allows landlords to retain rental profits within the company for reinvestment, such as acquiring additional properties or pursuing other business ventures. This enables the growth of a scalable property portfolio funded by reinvested earnings.
Please note: a mortgage is secured against your property. Your property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it. The Financial Conduct Authority does not regulate most forms of buy-to-let mortgages. Please also note: tax treatment is based on individual circumstances and may be subject to change in the future. The Financial Conduct Authority does not regulate tax planning.
Eligibility Criteria for Buy-to-Let Mortgages
Understanding what lenders look for is key to securing a buy-to-let mortgage. Here are some factors they’ll consider.
Property Value and Rental Income
Lenders also evaluate the value of the property and the projected rental income to ensure the property can cover the mortgage payments. Typically, lenders look for rental income that covers 125% to 145% of the mortgage repayment, which will be stressed at a rate specific to the lenders current product terms.
Credit History
Most lenders, as with a residential mortgage, will typically conduct a credit check to assess previous credit reliability. Lenders generally prefer applicants with no adverse credit history, although there are options available for those with less-than-perfect credit.
Buy-to-Let Mortgage Process
Securing a buy-to-let mortgage with Henry Dannell is straightforward and efficient. Here’s how it works:
Step 1: Initial Consultation
We start with a detailed consultation to understand your requirements, financial situation, and the details of the property. This allows us to tailor mortgage solutions that are perfect for your needs.
Step 2: Buy-to-Let Mortgage Application
We manage the entire application process from enquiry to offer, ensuring a seamless and efficient experience. Our team works diligently to gather and organise all required documentation. By proactively handling every step, we streamline the process to secure your application and achieve an offer as quickly as possible.
Step 3: Approval and Funding
We take a proactive approach in liaising with solicitors, agents, and other third parties to ensure a smooth progression from offer to completion. Our team stays in constant communication with all stakeholders, addressing any issues that arise and working collaboratively to resolve them promptly. By coordinating effectively and keeping everyone aligned, we help to minimise delays and facilitate a swift drawdown of funds.
Post completion
Ongoing Support: Even after securing your mortgage, we remain available to help with any additional future refinancing needs.
Buy-to-Let Mortgage Rates and Terms
Buy-to-let mortgage rates and terms can vary widely depending on the lender, the property, and your financial situation:
Fixed and Variable Rates
- Fixed Rates: These offer stability by locking in your interest rate for a set period, allowing you to plan your finances with certainty.
- Variable Rates: With a variable rate mortgage, your interest rate can fluctuate with market conditions, which can offer savings when rates are low but also poses a risk if rates rise.
Interest Only vs. Capital Repayment
- Interest Only: Many buy-to-let investors opt for interest-only mortgages, which keep monthly payments lower. At the end of the mortgage term, the principal amount will still need to be repaid.
- Capital Repayment: With this option, you pay off both the interest and part of the loan balance each month, helping you build equity in the property over time.
Maximum Loan-to-Value (LTV)
For Buy-to-let mortgages most lenders restrict to 75% LTV, however, some may consider lending up to 80% LTV. We will identify the lender that best suits your requirements in terms of leverage while also securing the most favourable product terms available.
Benefits and Features of Our Buy-to-Let Mortgage Services
At Henry Dannell, we’re committed to supporting you in achieving a tailored solution fitting your unique circumstances.
Competitive Interest Rates
Our strong relationships with lenders, we have access to highly competitive interest rates, ensuring you get the most suitable buy-to-let mortgage and terms.
Personalised Advice
Every client’s situation is unique, and we tailor our advice to fit your specific needs. From selecting the most suitable mortgage product to planning for your future financing needs, we’re here to support you.
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Our Case Studies
How we’ve helped clients invest in property
Buy-to-Let Mortgage – Concessionary Purchase
We worked closely with our client's accountant and tax adviser to devise a tax-efficient and favourable lending approach. Despite a turbulent market, we secured a highly competitive interest rate, acting swiftly when a scheduled withdrawal threatened the opportunity. Our collaborative efforts resulted in a successful transaction, providing a tailored solution...
Buy-to-Let Remortgage | Decline Overturned
Our client, a portfolio landlord, sought a new rate to avoid the lender's Standard Variable rate of 8.29%, which represented a 2.5% increase in interest. Despite the lender's initial refusal, we persevered and successfully secured a new rate, saving our client from a significant increase.
Buy-to-Let Remortgage
Despite encountering some obstacles, we were able to provide our client with the necessary support to obtain the full loan amount they required. Additionally, we facilitated a swift completion to avoid any potential exposure to their lender's Standard Variable Rate (SVR).
Large Portfolio Remortgage
Using our knowledge of the portfolio market, we were able to source a product/lending solution that was fitting to our client's requirements, whilst also obtaining a highly competitive high street rate that was secured prior to the end of their existing mortgage.
What our clients say…
'They are extremely responsive, highly professional, with many years of experience in their field, and as such, know mortgage products in the UK better than anyone.’
Investment Banker