Purchasing a property to rent out to tenants can be a lucrative investment but there can also be challenges. As well as ensuring compliance with the many landlord regulations, obtaining finance for property investments is more complicated than for standard residential mortgages.
The Buy to Let mortgage eligibility criteria are stricter than residential mortgages where the applicant intends on living in the property, and the product options are more limited.
At James Leighton, our Nottingham-based mortgage brokers specialise in helping clients to find the most suitable products for their needs. We spend time understanding the unique circumstances and requirements of each client so we can identify options to help you succeed in your property investment venture.
Our Buy to Let mortgage advisers have helped a diverse range of clients to navigate the challenges of applying and getting approved for Buy to Let mortgages, including many who have complex requirements.
The case study below shares insights into how we helped our client, Mr Hussain, with a very specific challenge and an urgent timeframe.
Background and challenges
We were contacted by Mr. A Hussain, who originally required a mortgage for a Buy to Let purchase. We were able to quickly work through the necessary processes to secure a mortgage that met his financial situation as a sole trader.
The client then contacted us some time later as he wanted to transfer his existing Buy to Let mortgage from a sole trader to a Limited Company. He had identified that he could qualify for a tax rebate of £26,000 by switching to a Limited Company mortgage.
The biggest challenge was that there was a tight deadline to meet in order for the client to be able to claim the money back. Not meeting the deadline would mean the client would miss out on a substantial tax return, so we needed to act with urgency.
Our efficient approach and in-depth knowledge of Limited Company mortgage lending criteria helped us to quickly establish the mortgage products that were most suitable and ultimately reach the required outcome on time.
Tailored solution
Our experienced mortgage adviser discussed the situation in detail with the client, gathering key information and then outlined what the next steps would be.
We also gathered information regarding the client’s financial goals and their property investment strategy to ensure that we could identify the products that aligned with their ambitions. This included the length of time they required the mortgage term over.
Using our Buy to Let mortgage expertise, we assessed the client’s position in terms of meeting lender criteria. This included reviewing different lender approaches, including how affordability assessments would be conducted.
Using all the information we collected, we were able to review the mortgage options available to suit Mr Hussain’s needs and the affordability documentation that he was able to provide.
Matching the client to suitable lenders
Providing proof of income as a Limited Company means you’ll need to supply business bank statements, company accounts, and demonstrate strong cashflow and consistent profitability. Lenders also look at the director’s personal income when assessing applications.
Other details that are taken into consideration by the mortgage lender is the projected rental income for the property, and we provided a local rental market analysis to support this.
We were able to quickly gather all the required documentation needed for lenders to assess the application and determine the maximum mortgage loan amount. These additional complexities can take time to work through, but we worked closely with Mr Hussain and explained in exact detail which documentation would be required.
Using the list of documentation requirements that we provided, Mr Hussain located all the paperwork and forwarded it to us.
The next step of the process involved applying with three different lenders who were most suitable and likely to approve the mortgage, and we were able to obtain a Buy to Let mortgage for Mr Hussain from Metro for the required mortgage amount and mortgage terms.
Outcome
Mr Hussain was delighted when we contacted him to advise him that his Limited Company mortgage from Metro had been approved and that he could now complete the process for applying for his tax rebate by the deadline.
Our efficient approach and in-depth knowledge of Limited Company mortgage lending criteria helped us to quickly establish the mortgage products that were most suitable and ultimately reach the required outcome on time.
Mr Hussain received his £26,000 tax rebate and was able to use the funds towards the future sustainability of his rental property.
With many recent tax changes impacting landlord profitability, obtaining a tax rebate was crucial for Mr Hussain to continue building his property business.
Through our tailored mortgage services, Mr Hussain has been able to significantly increase the return on his investment and continues to generate a steady rental income from the rental property under his Limited Company structure.
Contact us if you’re considering applying for a Buy to Let mortgage and need advice and support from experienced professionals.
This is for illustrative purposes only and does not constitute advice.
- Call: 0115 870 9520
- Email: enquiries@jlfs.co.uk