Buy to Let Mortgages
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- Simple and clear advice – no jargon
- We have access to a comprehensive range of mortgage lenders – including very specialist lenders for your individual requirements
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In recent years, there has been a mass of regulatory change, but the buy to let market is a buoyant one that can provide you with a steady rental income and you can generate capital growth as the value of your property increases.
Whether you are looking at a buy-to-let mortgage to give you a better lifestyle, to put away some savings, or fund your retirement, it’s important to have a mortgage broker such as ourselves to find you the right deal and hurdle any challenges.
At Smiths Financial, we will help you to find the most suitable buy-to-let mortgage for your budget and, as you look to make this investment, will provide impartial advice and guidance. We will look at various options to make sure you can still afford your monthly payments if rates go up. On top of this, we can help you to arrange insurance to protect you against loss of rental income if the property is unoccupied, damage and any legal costs.
House Multiple Occupancy (HMO) mortgages
If you are looking to become a landlord where your property is rented out to more than three tenants who are not from one household already, you are likely to need a specialist mortgage.
At Smiths Financial, we have access to lenders who could help you with a mortgage for your HMO venture, irrespective of how much experience you have.
And if you already have a property on an ordinary buy-to-let, it’s definitely beneficial to get in touch to see if we can help you transfer to a dedicated HMO mortgage.
We can also advise on HMOs, which are designed for landlords who want to rent their property out to more than three tenants who are not from one household already. They are quite specialist, and we can help you navigate this particular lending market and guide you on the rules, interest, and fees.
Eligibility
Most lenders prefer you to be a residential homeowner, and there is usually a minimum income requirement of at least £25,000 to get a buy-to-let mortgage. However, some lenders will consider you with no income limit. It’s worth bearing in mind that product fees can be higher than your standard mortgage and you can expect to pay 20% as a minimum for the deposit, but we can guide you through this.
Limited Company buy-to-let mortgages
If you are a looking for a limited company buy-to-let mortgage, we can help.
What is particularly appealing about a limited company mortgage for an investment is the variety of tax efficiencies including higher tax relief, as well as being able to shelter profits from personal taxation and include family members in the business.
As specialist brokers, we can, quite uniquely, help you explore the range of lenders who can provide solutions even if you are a newly-formed limited company. We’ll take you through the whole application process, providing support with what can be a complex area.
Things you need to know:
- Interest rates on limited company mortgages can be higher compared to standard buy-to-let mortgages
- The same level of Stamp Duty Land Tax will normally apply when purchasing under a limited company compared to personal ownership
- Finance costs, including mortgages, remain tax-deductible for limited company landlords
- Limited company landlords pay corporation tax, not income tax, on their rental income. The current rate of corporation tax is 19%
- Limited company landlords pay corporation tax of 19% on their capital gains and there is no tax-free allowance. Lower and higher rate taxpayers will pay 18% and 28%, respectively
- Limited company directors usually need personal guarantees
To secure a specialist mortgage for buy-to-let purposes, your limited company will usually be set up as an SPV (Special Purpose Vehicle), which is set up solely for buying, selling and letting of residential property.
The Standard Industrial Classification codes (SIC) that are normally considered are:
- 68100
- 68201
- 68209
- 68320
The Financial Conduct Authority does not regulate some forms of Buy to Lets.