Buy-to-let & HMO
Buy-to-let buy, HMO, LTD/SPV, 2nd Property
With rates that have never been so cheap in my professional career, now is the best time to review your buy-to-let mortgage or HMO or perhaps even dip your toe into the market for the first time. Like everything in life, the devil is in the detail and knowing what lender is right for you and your circumstances is essential.
Some lenders have a minimum income of £30k whilst others have no minimum income.
Some lenders stress test at a rate to rental of 5.5% @ 145%, regardless of the deal you are looking at.
Some lenders treat stress testing for 5-year fixed in a different way to 2-year fixed, so you may fail at a 2-year fixed deal but pass at a 5-year fixed deal.
In addition to this, you should also be more aware and informed on the way the government has changed tax relief on buy-to-let mortgages. It may be more tax efficient to purchase or change into an SPV (special purchase vehicle) or LTD company, to get your buy-to-let, but then again, depending on your circumstances or current tax banding of a lower or higher rate person, it may not. In all circumstances, you should seek independent advice from a tax specialist or accountant.
Some lenders will accept credit file issues and historic missed payments.
And some lenders will allow capital raising.
But what does this all mean for you?
The FCA (Financial Conduct Authority) is our regulating body and they say:
‘Know your customer, know your customer, know your customer‘
How can anyone say, I can get you the cheapest deal on the market, without knowing who you are? And what your personal circumstances are?
The cheapest deal may not always be the best deal, or even the right deal for you and the way it is set up, may cost you more in the long run if it is incorrect.
We are here to help you fully understand the implications of doing things a certain way, and show you the options which may give you a different result.
This could be especially beneficial with buy-to-let and the evolving taxation rules – but you may also need to get independent tax advice, or speak to your accountant if you already have one.
To summarise, one thing is for sure and that is we are in a situation where lender criteria, deals and loan to values are changing at an ever-increasing rate, sometimes daily and along with the government taxation rule changes, it has never been more important to get quality and professional help and advice.
This will enable you to make the right decision for you, not just any decision.
Why sbl Financial