Caboodle are a Buy to Let mortgage broker who specialise in helping landlords or prospective landlords find the right mortgage. Some of the most frequent questions we are asked in relation to Buy to Let mortgages are detailed below
Yes. However, tax is only calculated on the amount of earned income after the deduction of allowable expenses.
The following are eligible for tax deduction:
• Interest charged on the mortgage
• Rental/Landlord Insurance
• Maintenance of the property
• Letting Agent fees
• 10% of the rental income each year to cover depreciation in the value of furnishings such as sofas, carpets etc. (this does not include fittings such as new kitchens or bathrooms)
Generally with a Buy to Let mortgage you can borrow upto 85% of the value of the property. However, the more deposit you can put down the better the rates will be. Typically a deposit of 40% should secure you the best rates available in the market.
Yes, you can take out multiple mortgages, but only one mortgage per property. Most lenders will have a cap as to the maximum number of Buy to Let mortgages that you can take with them, but of course you can have other Buy to Let mortgages with other lenders too.
Yes, Buy to Let properties can be bought on an individual basis or as a limited company. However lenders will generally expect the Limited Company to be run as a company specialising in the buying and managing of properties. Options for Limited Company Buy to Let mortgages are restricted to commercial loans only.
It can be, but not all lenders look favourably in this area. Letting to a housing association or council can guarantee rental income, often for 3 – 5 years, but many lenders will not lend on this tenancy type and some insurers will not provide insurance cover for properties let to this market. As such careful consideration is needed prior to arranging your Buy to Let mortgage if this type of tenancy arrangement is a consideration
Generally speaking most Buy to Let Mortgages are taken on an interest only basis although repayment mortgages are also available. You are not required to have an investment vehicle in place if you take a Buy to Let interest only mortgage because the property itself can be used as the repayment vehicle.
This depends on the lender in question, some will look at the deposit you make and the rental income the property should achieve. Generally the rental income will need to be 125% of the Buy to Let mortgage payment. Some lenders will also require proof of personal income, but doing this can sometimes enable you to obtain a more competitive rate so will always be considered.
A Buy to Let mortgage is generally a little more expensive than a comparable standard residential mortgage and the arrangement fees can be higher too. However, a full range of interest rates including fixed, discount and tracker rates are usually available and in most instances any fees payable can be added to the mortgage.
It is a good idea to take out Landlord Insurance for your Buy to Let properties. These are specially designed policies which can cover anything from your buildings and contents to things like liability insurance, loss of rent and even alternative accommodation (ask one of our experts for more details).
No, Buy to let mortgages are not normally regulated by the Financial Conduct Authority. The only exception to this is where the property is being let to an immediate family member.
Yes. Our Buy to Let specialists are not only here to help you buy new properties they can help you remortgage any existing Buy to Let mortgage for you, maybe to help raise cash or simply just to get a lower interest rate.
If your question is not detailed above or you would like to discuss your requirements with Buy to Let specialist call us on 0800 151 2407 or 0121 308 9114. Alternatively, complete our on-line enquiry form and an adviser will call you back at no obligation.
We can often arrange face-to-face appointments in Mere Green, Four Oaks, Sutton Coldfield, Lichfield, Tamworth, Burton, Birmingham, Walsall, West Bromwich and many other surrounding areas of Staffordshire and the West Midlands. Alternatively we can make arrangements for you to visit our offices to discuss your requirements in more detail.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE SOME TYPES OF BUY TO LET AND INVESTMENT MORTGAGES.
Caboodle Financial Services Ltd
240B Lichfield Road
Sutton Coldfield B74 2UD
Telephone: 0121 308 9114