We tend to receive enquiries for Specialist Buy to Let mortgages in three main areas:
- Portfolio Landlords
- Limited Company Buy to Let mortgages
- HMO (House in Multiple Occupation) mortgages
Under current regulations borrowers with four or more mortgaged Buy to Let properties are be treated as “Portfolio Landlords’. This means that you will then be subject to the new portfolio mortgage underwriting checks (sometimes referred to as portfolio mortgage stress testing).
As part of these checks, lenders will need to make sure that your financial situation is stable. They will look at your entire Buy to Let portfolio, and are likely to consider:
- Your experience as a landlord
- Details of the mortgages on all of your Buy to Let properties
- Your assets and liabilities, including tax liability
- Historic and future expected cash flow from your portfolio
- Your income both from property and other sources.
If you are looking to become a portfolio landlord, it is therefore important to seek professional advice from a suitably qualified and experienced Mortgage Advisor. We have significant experience in this area so can look at your portfolio of Buy to Let mortgages and identify the best option for your circumstances.
Limited Company Buy to Let mortgages
We are often asked by our clients if they should own their buy to let property personally, jointly with a spouse / partner or if they should own their property via a limited company.
As is often the case in life, there is no straight response as the answer will depend upon many factors. Owning a buy-to-let property through a limited company can have tax advantages, but just as important are other factors, such as:
- How many buy to let properties you own or intend to own.
- How long you intend to own the property.
- Whether you rely on the income generated from the rental or whether you want to roll up the income to invest in further property.
- Your tax position from both an income tax and capital gains tax perspective.
There are other factors that could affect your decision as well, such as the impact on mortgage rates and fees.
Due to all of the above considerations, you should always seek accountancy advice from a suitably qualified and experienced accountant when buying or considering changing the type of ownership of an investment property.
However, once your decision has been made regarding how to hold your buy to let property, RM Mortgage Solutions can assist you in arranging the mortgage.
HMO (House in Multiple Occupation)
HMO’s have become a popular choice for both tenants and landlords. For individuals the rent is often more affordable and for landlords, gross yields are generally higher than can be generated by a standard buy to let property.
In order to operate a property as a HMO you might require a licence. Licences are issued by the local council in which the property is situated and are valid for five years. A separate licence is required for each property you run.
Unfortunately for buy-to-let landlords, different local authorities have differing criteria on what constitutes a HMO and, therefore, which need to be formally licensed. Perhaps even more frustratingly, mortgage lenders criteria can also vary in their definition of a HMO. This will then affect what types of properties they will lend against. For these reasons, it can often be advantageous to obtain advice from a HMO mortgage broker when looking for a HMO mortgage.
If you require specialist buy to let mortgage advice it is important that you obtain sound professional advice. For information and mortgage advice you can trust from a local Birmingham mortgage advisor; complete our Mortgage Enquiry Form or the Quick Contact Form.
A mortgage is a loan 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.
Please Note: The Financial Conduct Authority does not regulate most forms of buy-to-let mortgage.