Buy to let first time buyer mortgage
How to get a buy to let mortgage as a first-time buyer
First time buyer buy to let mortgage
If you are looking to purchase your first property with the purpose of renting it out, you will need a buy to let mortgage. However, getting a mortgage as a first-time landlord can be tricky without specialist help.
A buy to let mortgage is generally considered easier to obtain than a residential mortgage. This is because some lenders will use the property’s rental income as opposed to your earnings for their affordability calculations. Many lenders will therefore not lend on this basis, whilst others will need extra assurance.
To get a buy to let mortgage as a first-time buyer, you will generally need a large deposit (minimum 25%) or a high rental income to mortgage payment ratio. If this is not possible, then having a willing parent or grandparent on the mortgage with you can be advantageous. A guarantor mortgage could also be a good option, if you are struggling to obtain a mortgage by yourself.
As with any property purchase, it is best to seek advice in the first instance. A specialist mortgage broker like Fosters Financial knows which lenders to approach and will help you get the best possible deal for your needs. If they find a suitable product that you are happy to apply for, they will also manage your entire application on your behalf to ensure it is a success.
Buy to let first time buyer stamp duty
When buying a property to let, you will need to consider the additional costs involved, including Stamp Duty Land Tax (SDLT). As a first-time buyer, you will not pay the 3% stamp duty surcharge on second homes, as you do not already own a property. Instead, you will pay the standard SDLT rates, as the first time buyers relief does not apply to buy to let purchases.
First time buyer buy to let mortgage lenders
First-time landlords are perceived as an increased risk to mortgage lenders and many consequently will not lend to them. Buy to let first time buyer mortgage products are therefore very limited, which generally makes it difficult to secure a mortgage without using a mortgage broker.
The Financial Conduct Authority does not regulate most buy to let mortgages.