Rental properties were aimed at existing homeowners who wanted an investment opportunity. However, things have changed, and now, first-time buyers want to enter the buy-to-let market before they purchase a house of their own. It is possible to do so, although there are some requirements to fill. Knowing the facts is essential, and it is strongly recommended to hire a broker to guide you through the process and help you make the best decision.
There are different types of mortgages and lenders. People want to purchase a property at some point, either to live in it or to let it. It is overwhelming for someone who doesn’t know much about the subject and faces lenders, offers, regulations, restrictions, terms and conditions, and much more. The good news is that brokers exist, and they explain the situation very well, analyze people’s applications and financial status, and guide a buy to let first time buyer in the right direction.
Is Buy to Let First Time Buyer Possible
This is the question that many people have when they look into the subject. The answer is yes because many lenders accept such buyers and provide an offer. Of course, there are limitations, and the interest rates are higher also the deposit. It is necessary to have a generous amount, usually 25%, to obtain such a loan. This is because a buy to let first time buyer has no previous records or experience to allow the lender to figure out how trustworthy they are and if the person will respect all obligations.
Some lenders believe such people are high risk and will reject the applications from the start. Others might accept, but with specific terms and conditions. The good news is that some lenders have the expertise to analyze such borrowers and allow them to benefit from the necessary amount to invest in a property. The challenge is to find them and understand all their implications. For instance, you will not be able to live in the property if you purchase it to let it.
This is one of the reasons why so many people decide to work with a broker. They want to simplify the process and know which lenders accept such applications. With brokers by your side, you have the support and guidance to succeed. You will know what is permitted and what is not, how to fill out applications, prove that you are a safe bet, and show lenders that you can pay back the loan. No one wants to deal with unpleasant surprises and complications.
What Documentation to Prepare
Regardless of the type of loan, you plan to access, preparing documentation and filling out applications is a must. This is one of the best ways to provide supporting evidence that you are trustworthy and have the necessary means to pay the monthly installments. Some documents required include proof of deposit and earnings, a rental forecast, and proof of address. At UK Moneyman, you will find the complete guide and the specialists to assist in the process.
Credit history is significant, and it helps you understand your credit history before you begin the process. Within the report, you will find information needed by the lender. If you know what is in the report, you will be confident enough to answer all questions and learn about your financial history. It is understandable to forget some aspects, especially if you borrowed money before if you have some credits by now, and such.
Hire a mortgage broker
A buy to let first time buyer is encouraged to speak with a mortgage broker and clarify all situations. These types of mortgages are more complex compared to residential ones. They imply challenges, restrictions, and financial aspects that you need to know. Getting approval for the application is not impossible, and mortgage brokers have plenty of experience in the field.
They deal with all types of situations, not only with clients that want a simple loan or a mortgage for a house they plan to live in. Brokers increase the changes to accomplish your dreams and expectations. They are specialists in the field, deal with clients of all backgrounds and have access to lenders that you might not be able to find on your own. This is an essential consideration because brokers collaborate directly with lenders.
The criteria to meet
The buy to let first time buyer needs to meet the criteria to obtain the loan. For example, proof of income is necessary, and not one that comes from rental properties. A minimum is required annually, and every lender specifies the amount. The income must be stable and result from other sources. The deposit size is also crucial, and the larger, the better.
Aside from these, you need proof of your address to show that you have no intentions to move into the investment property. It would be best if you continued living in your current home. If for a traditional mortgage, you can improve your credit score and some lenders are more permissive, it is not the case for a buy to let first time buyer. The person must have a strong credit rating.
How to Secure Your Investment
Hiring a broker is a great way to secure your investment. Whenever you want to make a step in the right direction and invest in a property, you need to know how to achieve your goals. Not everyone has the necessary amount to purchase a house on their own without needing a loan. They must access a lender to obtain the required funds, but this means filling out applications, finding the credit score, securing proof of income, and having a deposit.
Reducing all risks is always encouraged, and this can be done with the help of a broker. Such a professional acts as an advisor and obtains the necessary documents on your behalf, helps you fill applications, and puts you in touch with lenders. You will get the best deal and understand what a buy-to-let mortgage is all about.