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 Mortgages
Investment
Property Mortgages
Investment property mortgages are
much the same as other mortgages in one respect.
Like standard residential mortgages,
investment property mortgages require an assessment
of your suitability to be a landlord. Some of the
criteria for determining this are similar to those
for residential mortgages, while others apply only
to investment property mortgages.
Providers of an investment property mortgage will
apply stricter criteria to new landlords than to
existing landlords with a track record in property
management. This means that new landlords will find
that they are asked to give similar guarantees for
their investment property mortgage as for their
residential mortgage.
What lenders want
Lenders will want to know that landlords can repay
their investment property mortgages. This may mean
that they need to have a job or be able to show
 some
proof of their income. Lenders will want to be sure
that investment mortgages will be repaid even if the
property is vacant. This may happen for a short time
between letting periods or for a long time if the
rental market in a given area starts to slow. This
is one reason that an investment property mortgage
should be seen as a long term proposition.
Buy To Let Money
Considerations
Many lenders will want to make sure that new
landlords meet a certain earnings threshold before
approving investment property mortgages. They may
also want landlords to be homeowners who are up to
date with their mortgage payments. Paying a
residential mortgage properly means that landlords
will pose less of a risk when taking out investment
property mortgages.
Another consideration, especially for new landlords,
is a good credit report. Again, someone who is
issuing investment mortgages is looking for signs of
good, prudent financial management. More experienced
landlords may not have to provide all these proofs
when applying for investment property mortgages, as
they will already have a proven track record in
property investment.
Rental income is a key consideration when it comes
to an investment property mortgage. This should
exceed mortgage payments by around 120 per cent,
though rental calculation values are constantly
evolving. Lenders will also want to see that
landlords have looked at the costs involved in
refurbishing and running their rental property, so
that their investment property mortgage make sound
financial sense.
Like other mortgages, the deposit is an important
factor when landlords are applying for an investment
property mortgage. Investment mortgages typically
offer a loan to value of around 75 per cent, which
means that landlords have to find a 25 per cent
deposit. This may increase to as much as 30 per cent
with the lower loan to values offered on some
investment property mortgages.
Finally, lenders are likely to impose conditions, on
new landlords especially, before approving an
investment property mortgage. This might involve
specifying the type of tenant that may or may not
rent the property, the type of property the Buy To
Let mortgage can be used for, the type of tenancy
agreement and the affiliation of the letting agent,
if one is to be used. All of these factors will
affect whether landlords qualify for investment
property mortgages.
Commercial
Mortgages
Commercial owner
occupier mortgages (business mortgages) are designed
for individuals and companies purchasing or
remortgaging a property to be used as a business
premises.
One can negotiate business mortgages with a huge
range of lenders including major banks, commercial
building societies, regional and local building
societies and specialist commercial asset lenders.
Rates for business mortgages are dependent on your
industry sector and by your business' and your own
individual track record.
The value of a broker within this field can be
important, due to the bespoke nature of every single
business mortgage transaction. Terms for business
mortgages are not set in stone and the role of the
broker in the transaction is to negotiate the best
mortgage rate and terms.
All finance for business mortgages should be
tailored to meet the borrower's needs. Where
suitable, elements of the commercial loan structures
available to clients can include:
• Interest-only mortgage periods
• Long-term repayment mortgages with terms up to 25
years
• Fixed, variable and hedged mortgage rates
You can arrange business mortgages for most types of
business premises, and also arrange funding on niche
propositions including hotels and guest houses,
health clubs, pub and restaurants, schools and care
homes.
Please note: you will probably need
to give the lender a first charge over the property
you intend to buy with the loan. This means that you
must take professional advice before you take an a
loan of any sort.
Commercial
Investment Mortgages
Commercial investment mortgages are
designed for individuals and companies purchasing a
commercial property to rent out, profiting from
rental income and property value appreciation.
Commercial mortgage rates are rarely standardised in
the same way as your home mortgage, instead each
mortgage is individually priced to match the
strength of the proposal. In basic terms, the
deposit requirement and headline mortgage rate will
depend on the industry sector, the quality of tenant
and the length of the lease.
Typically, one can arrange commercial funding up to
80% loan to property value dependent on the quality
of the asset and the tenant. Commercial finance
opportunities are not limited by borrower
circumstances and lenders can often accommodate a
variety of commercial lease terms and tenant
qualities.
Commercial mortgages can be provided for all
property types, including prime office property
mortgages and retail commercial property investment,
mixed use, secondary, industrial, warehouses/retail
park and multi occupancy serviced offices.
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