Buy to Let

For those wanting to rent out their new property.

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A Guide to Buy to Let Mortgages

There are many reasons for wanting to invest in property. Some will do it for an additional monthly income and others will use it to grow the lump sum of money they have.

Whether you want to become the UK’s next biggest property tycoon or whether you’re simply buying you’re first investment property, we are here to help you every step of the way.

What is a Buy to Let Mortgage?

A buy to let mortgage is a special type of mortgage that is required if you’re buying a property to rent out (or remortgaging to rent out). The criteria is completely different for a buy to let mortgage and the lender largely bases the loan amount on the rental income the property is likely to achieve. A Buy to Let mortgage typically requires more deposit (typically a minimum of 20%) and the rates and arrangement fees are usually higher than a residential mortgage.

Why consider a Buy to Let?

If you have some spare funds that you want to try to grow, property can be a great place to put your money. It can be a very profitable area of investment to get into.

Having said that, a buy to let mortgage is a big commitment and you need to have a serious think about it before jumping into something like this. There can be many complications that you can’t predict from additional tax implications to difficult tenants.

Buy to Let FAQs

If I want to let out the property I live in, do I have to have a buy to let mortgage?

Yes. If you are considering renting out the property you live in you must have a buy to let mortgage. If you have an existing residential mortgage and you are tied in with your current lender, they might give you an “authority to let/consent to let” for a set period of time. This will come at an extra cost and it’s not guaranteed that the lender will allow you to do this so you will need to speak with them first and ask for permission. This may not always be the best option for you so it’s important that you get advice.

Should I use a LTD company to buy the property?

LTD company buy to lets are becoming more popular due to the changes in taxation. Before you decide about whether you should buy in a LTD company you need to explore both options. Purchasing in a LTD company could be more tax efficient but they will typically charge higher fees and a higher interest rate. There are many different things you need to consider before you make this important decision. The good news is, we will do all this for you free of charge and provide you with all the different options you need. We would then recommend speaking to an accountant or a tax specialist before you decide how you want to go ahead.

What are the tax implications?
There are many different tax implications that you need to consider when buying a buy to let… to be frank, this is a minefield and something that you need to get separate advice on. We are able to help you understand the different liabilities but you should seek independent tax advice. We work alongside partners who’ll be able to help you with this and put you in a more informed position.

There are three main areas of tax you pay with a buy to let:
– When you buy the property
– On the annual profit, you make
– On the capital gain when you sell it.

Mortgage Types

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Buy to Let

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AL Mortgage Solutions Ltd
35 Eccleston Street, Prescot, L34 5QA

0151 329 3313