Introducing the New Appleton Mortgages Website
Appleton Mortgages, a trusted name in mortgage and protection services based in Harlow, is thrilled
13 November 2024
We have a team on hand, waiting to help you. Enquire today and see how we can help!
A buy to let mortgage is a type of loan specifically designed for purchasing properties that you intend to rent out. Unlike a standard residential mortgage, buy to let mortgages take into account the potential rental income from the property, which can affect how much you can borrow. This makes them suitable for both first-time landlords and those looking to expand their property portfolio.
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Deciding to invest in a rental property involves several key choices, but we’re here to help you navigate the process smoothly. Each situation is unique, so here’s a straightforward guide to determine what works best for you:
Becoming a landlord can be a fantastic way to boost your income or secure a long-term investment. To maximise your profitability, it’s essential to seek clear guidance from a professional mortgage adviser. That’s where we come in. We stay up-to-date with the latest UK legislation and regulations, ensuring you receive tailored advice on your mortgage needs. We can also connect you with tax specialists to help you make the most tax-efficient decisions for purchasing a rental property.
Lenders typically assess how much you can borrow by examining the property’s value alongside the anticipated rental income.
To account for unexpected expenses—like periods when the property might be vacant, estate agency fees, and maintenance costs—lenders usually incorporate a safety margin. This is determined using the Interest Coverage Ratio (ICR), which indicates the rental income needed to cover the mortgage and related costs.
Due to recent regulatory changes, these calculations have become stricter. Lenders will also conduct a ‘stress test’ on the mortgage to ensure that potential interest rate rises won’t jeopardise your profitability. The minimum stress test rate is set at either 5.5% or 2% above your actual mortgage rate, whichever is higher.
For example, let’s consider a mortgage of £250,000 with a typical ICR of 145% based on the mortgage interest and a stress test interest rate of 5.5%. In this case, the minimum required rent would be approximately £1,478 per month.
This is often referred to as income top-slicing. Some lenders may take your personal income into account if the stress-tested rental income falls short. They will assess your earnings against your overall expenses, including your residential mortgage, household costs, and rental property expenses.
If you have surplus income after covering all your outgoings, these lenders can combine it with the expected rental income to determine the maximum amount you can borrow.
With our expertise, you can feel confident in making informed decisions about your buy to let investment.
We have a team on hand, waiting to help you. Enquire today about how we can help.
At Appleton Mortgages, we specialise in guiding both first-time landlords and experienced portfolio landlords through the buy to let mortgage process. Here’s how we can assist:
With Appleton Mortgages, you can feel confident that you have expert guidance every step of the way in your buy to let journey.
Our approach focuses on understanding your unique circumstances and tailoring our advice to fit your specific needs.
With years of experience in the mortgage industry, we navigate the complexities of the market with ease.
Nothing is ever too complex for us! We thrive on finding solutions, whether you have a unique financial situation or specific requirements.
If you already own 4 or more properties, or have the ambition to build your portfolio, there are now additional regulatory requirements for lenders to factor in to their assessments. The regulation is not prescriptive but some examples include the lender’s relationship with the borrower, how much experience the borrower has as a landlord and a view of the borrower’s overall property portfolio.
We have many clients who are classed as ‘portfolio landlords’ and have expertise in helping clients refinance and build their property portfolios, with strong relationships with all the key lenders in this market.
It’s up to you to follow legislation, including regular inspections and maintaining tenants’ rights. You must handle repairs and maintenance, rent collection, tax payments and other legal requirements correctly. Items to keep up‒to‒date include:
You can either manage everything yourself or hire professionals to take care of it for you. For example, you can avoid all the hassle of day‒to‒day management by taking on a fully managed service from your letting agent. Our sister company Foxtons can do exactly that for you.
Ultimately, the choice depends on your individual circumstances, financial goals, and tax situation. Consulting with a mortgage adviser, as well as a tax specialist, can provide personalised guidance to help you decide the best route for your buy to let investment. At Appleton Mortgages, we’re here to support you through every step of the process, ensuring you make an informed decision that suits your needs.
Deciding whether to purchase a buy to let (BTL) property in your personal name or through a limited company is an important choice that can significantly impact your finances. We’ll answer the questions for each next…
There’s lots of numbers involved and calculations to do when dealing with finances, explore our free-to-use calculators to keep things simple.
Calculate what a monthly mortgage payment might look like for you.
At Appleton Mortgages, we’re committed to guiding you every step of the way, making the process as seamless and enjoyable as possible.
Understand our 8 step process, from having your initial chat to receiving your keys.
Contact us via phone, email, or our website to schedule your initial consultation. During this conversation, we’ll discuss your goals, financial situation, and any specific requirements you may have. This helps us understand how we can best assist you.
In our in-depth consultation, we’ll dive deeper into your needs and preferences. We’ll gather essential information, such as your income, credit history, and desired property type. This allows us to assess your mortgage options and outline a personalised plan.
Once we have all the necessary information, we’ll conduct thorough research to find the most suitable mortgage products for you. We’ll present our recommendations, explaining the benefits and potential drawbacks of each option, so you can make an informed decision.
After you choose a mortgage option, we’ll help you prepare your application. This includes gathering all required documents and ensuring everything is in order. We’ll guide you through the paperwork and clarify any questions you may have.
We’ll submit your mortgage application to the lender on your behalf. Our team will stay in close contact with the lender to ensure everything moves smoothly and address any queries that may arise during the process.
As your application is processed, we’ll liaise with estate agents and solicitors to keep everyone in the loop. This allows you to focus on your day job while we handle the running around and ensure all parties are aligned.
Once your application is approved, you’ll receive a formal mortgage offer. We’ll review the offer with you to ensure you understand the terms and conditions, and we’ll help you navigate the acceptance process.
Finally, once all legal work is completed and the funds are in place, your mortgage will be finalised. We’ll be there to support you through the completion, ensuring everything goes smoothly and you’re ready to move into your new home!
Appleton Mortgages, a trusted name in mortgage and protection services based in Harlow, is thrilled
We offer face to face appointments in the areas where we have brokers. If you live outside of that area, we can still help you! We offer phone call and zoom appointments nationwide.
There may be a fee for arranging a mortgage and the precise amount will depend on your circumstances. This will typically be £295
Your home may be repossessed if you do not keep up repayments on your mortgage.
Appleton Mortgages Limited is an Appointed Representative of Stonebridge Mortgage Solutions Ltd, which is authorised and regulated by the Financial Conduct Authority.
Registered Office: Appleton Mortgage Limited,85 Great Portland Street, London, England, W1W 7LT. Registered Company Number: 15807713.Registered in England & Wales/Northern Ireland/Ireland/Scotland.