Buy to let mortgage for first time property investors.

Getting started in buy to let and property investment

Buy to let mortgages | Bridging finance | Short term loans | Refurbishment | Development

The problem with getting a buy to let mortgage

All banks are the same, aren’t they?

Every bank, every loan product is guided by criteria.  Where you might miss out with one lender another will be perfect.

Documentation

We all know that situation, just when you think the loan is sorted the bank come back for more information and paperwork and it all takes another few weeks to get a decision.

The best rate

With most business owners going only to their own bank for a loan quote there’s very little competition. How will you know the terms they offer are the best you could get?

We have built up a great relationship with the team at Acorn, and they have made all our business purchases very straightforward.

Dennis & Maggie Cottam 3 businesses purchased with the help of Acorn.finance

The mistakes property investors make…

We don’t fit the criteria.

With stricter criteria for all borrowers not having the minimum income or another property can mean rejection from many lenders.

To incorporate or not

There’s a lot of poor advice out there regarding incorporating your property portfolio.  If you’re in the great position of starting out make sure you choose the right option from the outset.

Not being fully prepared!

Lenders want to know who they are lending to, why and how they will get their money back.  Not having up to date accounts, directors on board or basic information available will bring your application to a rapid halt.

I don’t understand the new tax rules

The government have made property investment much more complex but not unattractive. Make sure you get the right advice before you buy.

Lacking a business plan!

Property is a business, not a sideline.  Consider the short and the longer term, why you are investing and how you’ll repay the debt.

Not checking the terms!

A buy to let mortgage can be a major commitment, understand what you are signing and if in doubt get an expert to explain it to you.

Expecting the lender to shoulder all the risk!

If you’ve got collateral but don’t want to risk it for your business then why should the lender take a risk on you?

If you don’t have the confidence to back your business then why should they?

Let Acorn.finance arrange a buy to let mortgage to fit your needs.

Working with an award-winning broker such as Acorn.finance;

Our experts will help you to understand your buying power without reverting to jargon like LTV or DSCR.

We understand the advantages and disadvantages of incorporating into a limited company and will help you to make a decision as to how best to structure your buy to let property portfolio.

We’ll take the time to compare lenders and deals with you, explain why we might recommend one lender over another and how to best meet your needs.

Working with you we’ll take the time to understand your long-term aims, short-term needs and your skills and help you to understand how best to use your money and equity alongside our variety of mortgage and loan products to best achieve those goals.

Mortgage comparison sites or brokers?

Our 21 years of financial expertise, arranging loans and mortgages means we have a deep understanding of how lenders work and which ones will work for you.

Because no two people or properties are exactly alike the comparison sites come up lacking, there are so many criteria to be met in every case that only by taking the time to understand your own situation can we recommend a lender’s buy to let mortgage products for you.

We work with an open panel of almost three hundred different lenders, each having their own speciality or niche and our in-depth knowledge of their lending criteria and products helps us to narrow your search down to a few, then one ideal lender and investment loan product.

Why look at property investment (buy to let)?

With the Bank of England Base Rate still at 0.5% savings rates are pitiful.

Despite the government’s attempts to tax but to let investors out of the market property investment remains a popular vehicle for building long-term wealth.

With low-interest rates seeming to be a permanent fixture of the economy and increasing volatility in the stock market the long-term benefits of rental property remain extremely attractive to many of us.

What is a buy to let mortgage?

A buy to let mortgage (or a residential investment mortgage) is a type of commercial mortgage where the business is that of renting out property.

Unlike an owner-occupied commercial mortgage where the owner’s business would repay the mortgage, the property is rented to tenants who effectively pay the mortgage, normally with a margin on top to cover any rental voids (gaps between one tenant moving out and another moving in), maintenance and marketing costs.  It’s also great to have a little bit of profit for yourself to invest in additional property or the occasional holiday!

Huge deposits?

Deposit levels are also much lower than is the case with other commercial mortgage types, sometimes as low as 15% of the property value, and with some of the fees and cost able to be added to the loan, it can be much more affordable than many people think.

Buy to let mortgage rates

Like all forms of commercial mortgage or residential mortgage interest rates vary enormously in the buy to let mortgage sector.  Buy to let mortgages  do tend to be less expensive than other forms of commercial mortgage as residential property is much easier to dispose of in the case of default then commercial property.

Our product updates will keep you up to date with what’s going on in the buy to let mortgage market but the best place to start is a conversation with one of our expert advisors.

Making the payments

As we mentioned above a buy to let mortgage relies on the rental income from the property being let to cover the mortgage payments (either interest payments or capital and interest depending on your circumstances and plans).

Lenders have different criteria for judging your ability to meet the payments.  Generally, they will base this on the rent coming from the property but some lenders will take your overall income into account if the rent falls short.

Typically lenders will look for a margin above the interest payments, to ensure your ability to cover the interest, at least, even if there are rental voids.  For the majority of cases, this will mean coverage of 125% of the payment, or a theoretical payment based on a higher interest rate if they are offering a short-term discounted interest rate.

This means that if your mortgage payments work out at £1,500 per month (£18,000 per year) then the rent would ideally be at least £22,500 per year or £1,875 per month.

In the case of higher rate taxpayers or portfolio landlords this figure can vary significantly, please discuss with one of our experts before committing to a property, we might be able to help you get a better deal than you are expecting.  Especially if you’ve been looking at the major comparison sites!

Will you qualify for a buy to let mortgage?

You might be worried about being able to get a buy to let mortgage, especially if you’ve been looking at the comparison websites.  Our wider range of lenders fits more circumstances than the mainstream lenders;

  • No minimum income limits
  • No six month ownership rules
  • No maximum portfolio sizes
  • Adverse credit situations considered on a case by case basis

Whats more, if the property is not ready for letting then we have a full range of refurbishment finance options to cover a quick paint and update of kitchens and bathrooms through to conversions and extensions.

Interest only or capital repayment?

Although for owner-occupied commercial mortgages and residential mortgages it’s normal to opt for capital repayment (ie. paying the loan off over the term of the mortgage), investment mortgages are more normally interest only.

That means the monthly payments are only paying the interest due.  This leaves the full capital borrowed to be repaid at the end of the term.

The advantage of this is that it frees up much more income for further property investment or to enhance your wages, the disadvantage is that at the end of the term a property might have to be sold to repay the loan if you can’t remortgage.

If you are at a point where you are no longer growing your portfolio and wish to retain the income into retirement, it could be worth beginning to repay capital.

I got the best deal and the best service

Jillie Stross – past and future Acorn.finance customer

Funding options – business finance

Cash-flow funding

Very quick and easy process which has now enabled me to grow my business. Wouldn’t use anyone else!

We also arrange property finance

We have used Acorn.finance for over 20 years and can’t recommend them enough, very knowledgable, efficient, friendly and would definitely use them again

Les Kynes – past and future Acorn.finance customer

Opportunities to work with Acorn.finance

Acorn.finance work with a broad variety of introducers from a broad variety of sectors including;

  • Business transfer agents
  • Estate agents
  • Accountants
  • Solicitors
  • Mortgage Brokers
  • Financial Advisors
  • Insolvency Practitioners
  • Business Consultants
  • Coaches

As one of the UK’s leading commercial brokers, Acorn.finance is growing our regional representation.

We’re looking for entrepreneurial business to business experts to join our rapidly expanding team in order to meet our mission of Every business & Every Investor having access to the best possible funding sources.

Working with a broad selection of bridging lenders in the regulated space and Together Residential Mortgage,  Acorn.finance can package the cases your network stops you processing.

Superb service from the first phone call to the final transaction. Acorn were fantastic and we would never of got funding without them, we are now in our third year of trading and business is great.

Lisa Whitney – 5* Customer review

Contact Acorn.finance – call us free

344 – 354 Gray’s Inn Road

London

WC1X  8BP

Redwood House

Brotherswood Court

Almondsbury Business Park

Bristol, BS32 4QW,

Peter House

Oxford Street

Manchester,

M1 5AN

No 2 Wellington Place

Leeds

LS1 4AP

83 Princes St.

Edinburgh

EH2 2ER

Or complete our contact form and we’ll contact you.


Small business loan

Low minimum turnover

Flexible repayment terms

No minimum time trading

Security not always needed (only a Personal Guarantee)

Flexible facility

Extend or replace your overdraft

Use, repay and re-use the facility

Working capital, equipment, wages or growth

Merchant cash advance

Borrow against future card sales

Flexible repayment options

Pay a percentage of card sales

Less for a quiet month, more if you’re busy

Traditional lenders

As a whole of market broker we have access to the major banks and fintech lenders.

Crowdfunding

We can also access all the crowdfunding platforms offering;

Loans

Equity investments

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