First time buyers might not qualify
In theory, it is possible for first time buyers to get a buy to let mortgage. The reality of this though is it is very difficult as lenders view this group as ‘too risky’. There are various lenders that will consider your application if you have never owned a property before, this will come with certain requirements needing to be met to satisfy criteria. Requirements will tend to be minimum deposit of 25%-30% and minimum income of £18,000.
Lenders will tend to take the view of carefully assessing an applicant’s circumstances and reasoning as to why they want to purchase a buy to let without owning there own residence at the time. Property finance brokers like Finance Jeanie can assist you if finding the best lender to fit your scenario.
Age is less of an issue for buy to let mortgages
It wasn’t that long ago that getting a mortgage in your fifties was a tough task. Now lenders have changed their age limits due to sheer demand for buy to lets from buyers in their sixties and beyond! Some of the offerings from lenders will now allow borrowers to have the loan term in place for up to the age of 90. Specialist lenders tend to be more flexible in this department than the big banks and building societies and hold this area of the market as their niche. There is even lenders out there that have no age limit at all – this meaning potentially being able to borrow at any age!
Getting a buy to let mortgage requires a big deposit
Standard residential mortgages can be secured with as little as 5% of the property purchase price as your deposit – the minimum deposit for a buy to let mortgage is generally 25% however, some lenders do offer 20% deposit options. Again, to reiterate from the ‘first time buyers might not qualify’ section you will also need to meet the minimum income requirements which lenders are far more focused on when it’s your first buy to let purchase.
Know your area
It can be very tempting to grab a bargain but you need to consider the area and its demand for rentals. The key is to do your research and then do some more, if you find yourself in a position where you decide to sell the property you want to make sure that you are not going to take a huge hit on the price. It is also sensible to look at things such as what type of tenants are you likely to attract in the area? Will there be a demand for students, young families or even young professionals? These key bits of information will help narrow down which type of buy to let property you purchase.