Buy-to-Let Mortgages

An interest-only mortgage is where a borrower will only pay interest for the duration of the mortgage without any reductions being made to capital. Whilst this is usually not the best option for residential mortgages, it can often be the most suitable for Buy-to-Lets due to the reduced monthly repayments. 

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With an interest-only Buy-to-Let mortgage, rental yield can be maximised and can offer tax efficiency benefits, depending on the borrower. However, it is important to note that with interest-only mortgages, the balance does not reduce on a monthly basis and so a strategy will be needed to repay the loan in the future. This may involve selling the security property or some other asset. 

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To see whether an interest-only Buy-to-Let mortgage is right for you, don't hesitate to contact us now.

With the legislative changes to stamp duty and Buy-to-Let mortgage interest tax relief, owning a rental property in the name of a limited company has never been more efficient. With individual landlords losing much of the interest tax relief they received on their Buy-to-Let mortgages, special purpose vehicles (i.e. limited companies set up specifically to hold buy to rent properties) have become far more popular options for prospective investors.    

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Setting up SPVs is relatively straightforward and inexpensive. In most cases, a limited company can be incorporated online with Companies House without extensive checks. When registering, you will need a valid SIC ('standard industrial classification of economic activities') code which basically will allow you to meet lenders' criteria and own properties under the company name. The usual SIC that lenders require is related to property letting which is mentioned by Companies House under section L ('Real estate activities'). 

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However, SPVs may not always be the best solution since the range of lenders offering SPV mortgages is usually less than for standard Buy-to-Let mortgages. Regardless, we can help you to decide whether a SPV mortgage is right for you.

A 'portfolio landlord' is defined by the Prudential Regulation Authority (PRA) as a landlord who has four or more mortgaged Buy-to-Let properties across all lenders. This portfolio can include holiday lets, SPV-owned properties, HMOs and standard Buy-to-Let mortgages, which may be owned on a sole or joint basis. 

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The definition of a portfolio landlord is important as it means that lenders will treat applications differently to standard Buy-to-let mortgages. The PRA expects lenders to conduct specialised underwriting which accounts for the complex nature of portfolio landlord mortgages. 

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Notably, lenders will treat a portfolio mortgage as a single account, even if it incorporates mortgages for several properties. This means that rental income and loan-to-value ratio is averaged out across the portfolio. Hence, lending decisions are based on the loan-to-value ratio of the entire portfolio.

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The complex nature of portfolio mortgages makes it vital to seek specialised advice and at Hilton Finance we can utilise our extensive experience to meet your portfolio needs.

A house in multiple occupation (HMO) is broadly defined as a property rented out by at least 3 people who are not from 1 ‘household’ (e.g. a family) but share facilities like the bathroom and kitchen. These can include shared houses, hostels and shared worker accommodation.

 

The unique structure of a HMO is reflected in the type of mortgage required. HMOs, by their very nature, are required to follow more stringent regulation and ensure they are compliant with certain key requirements, such as fire safety rules. As well as this, landlords often require licensing to rent out their HMOs, which make them a relatively niche market. To add to this, lenders can adopt varying definitions of what they consider to be a HMO.

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For this reason, the advice of an experienced HMO broker becomes invaluable. Here, at Hilton Finance, we can work with you to find specialist lenders who will provide targeted solutions for all your HMO needs.

As an expat, you can benefit not only from residential mortgages but Buy-to-Let mortgages too. There are several reasons why you might want an expat mortgage on a Buy-to-Let property:

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1. If you're planning on moving overseas and wish to remortgage your current residence on a Buy-to-Let basis.

2. If you're living abroad but wish to grow your investment portfolio through the purchase of Buy-to-Let properties.

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As an expat, a Buy-to-Let mortgage may be a lucrative investment but there are additional challenges that face prospective applicants. Lenders often have tighter criteria for expat mortgages and the range of countries they consider can vary. Additionally, the assessment of affordability can become more difficult depending on the currency of your income and whether your are considered a UK taxpayer. 

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As such, it is strongly advised that you seek professional advice when applying for an expat mortgage. At Hilton Finance, our experience in delivering expat mortgages, particularly for clients in the Gulf countries, can become indispensable for any potential borrower. 

Buy-to-let mortgages need not be restricted to purchases but, like residential mortgages, can involve raising funds on existing BTL properties. The reasons for remortgaging a Buy-to-let property are largely the same as a residential property. They include: debt consolidation, capital raising, investment into business and the purchase of further Buy-to-Let properties. 

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The advantage of remortgaging your buy-to-let property is that you can maintain the equity on your residence; or, if you have little equity left, Buy-to-Let remortgages can provide additional funds. 

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Alternatively, you can remortgage your existing Buy-to-Let by switching lenders and moving to more competitive rates. In turn, you minimise your monthly repayments and maximise your rental yield. However, the remortgage process requires consideration of many factors, which can make it difficult to secure the cheapest product. 

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Yet, Hilton Finance are here to ensure that you find the most appropriate mortgage for your short-term and long-term needs. And with our access to specialist providers of Buy-to-Let remortgages, we can help you secure the most competitive finance.