If you want to buy a property to rent out, a buy-to-let mortgage is a must. This checklist is designed to give you the lowdown on everything you need to know from choosing the right property to tax implications.
1. Check you’re eligible for a buy-to-let mortgage
You might be looking to purchase a second property to rent as an investment, or perhaps this is your first foray into the world of home ownership.
As with any type of mortgage, you have to meet certain criteria to be eligible for a buy-to-let mortgage, but in a way it’s slightly more complicated than if you were to apply for a standard residential mortgage.
You can apply if:
- you can afford the mortgage repayments - the lender will ‘stress test’ your application to make sure.
- you have a healthy credit record and any existing mortgage or debts won’t prevent you from making it work.
- you earn in excess of £25,000 a year - you may struggle to find a buy-to-let mortgage if you earn less.
- you’re a certain age when the mortgage finishes (typically between 70 and 75). For instance, if you’re 50 when you take out a 25-year mortgage, it will finish when you’re 75.