Covering the Bases

Rupert Smith of Complete RPI gives an overview for those looking at mortgage finance options in the UK residential market

6 - Let-to-Buy

Remortgaging your existing property on to an official Buy-to-Let or Rent-to-Buy scheme is a good option for some, as this could enable you to release some much needed equity in your current property to use as a deposit for your new home.

Lenders will assess the borrowing capacity not on your current income, but on the rental income that can be achieved, which is then put through a specific formula. For example, the gross rental income on your existing property must equal 125% of the interest only mortgage payments at the mortgage pay rate.

This cover does vary from lender to lender so it is important to speak to an expert who understands all the small print.

7 - Being a Landlord

Whilst being a landlord can be highly profitable, it brings with it responsibilities both to maintain property and its equipment. It also brings with it the responsibility to comply with a plethora of rules and regulations. Your agent’s comprehensive lettings and management service can deal with these on your behalf.

You should also prepare for the possibility of the odd void period. Suddenly having to pay two mortgages may be a stretch so it is a good idea to have at least three to six months mortgage payments in an emergency account just in case. There are also a plethora of rules and regulations a landlord should know, so make sure you do your homework and know what you are liable for.

8 - Building a Portfolio

For more experienced landlords, or if you have a large property portfolio, actively managing your portfolio to ensure you have the right rate on each property, or are able to gear up and release equity for future purchases is of vital importance when looking to grow. At complete RPI we offer this as a free “Asset Management” service to all clients

It may be possible to agree a credit line or facility for you to buy additional properties quickly and cheaply, making the most of rental and capital growth opportunities.

9 - Development Opportunities

For landlords with portfolios of a certain size, the line often blurs between residential investment and commercial financing, whether it is developing a site, converting a property into flats or even building from scratch.

Getting the right advice in this area of the market is just as critical and can often mean the difference between turning a healthy profit or not.

10 - Complex Requirements & Large Loans
Many of our clients have a need for more bespoke lending and there is no financing too big or complex for us to handle. We are well versed with assisting with multi-million pound transactions and have advisers on hand with years of experience in this area.

There is no guarantee that it will be possible to arrange continuous letting of the property, nor that rental income will be sufficient to meet the cost of the mortgage.

Your home may be repossessed if you do not keep up repayments on your mortgage.

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