A landlord’s guide to mortgages
Our Landlord’s Guide to Mortgages is designed to help you understand the different mortgage types open to buy-to-let properties – and which will maximise the potential income from your investment.
Should I take out Contents Insurance?
Although it’s rare for mortgage providers to insist on Contents Insurance, it’s a very good idea to have it anyway. Usually non-permanent fixtures and fittings, such as carpets, laminate flooring, tiles and curtains or shutters aren’t covered under Building Insurance alone. Your provider will unlikely pay to replace these unless you have Contents Insurance in place too.
Speak to an advisor
What does Building Insurance cover?
Building Insurance saves having to pay out for damage from:
● Fire from an electrical fault, bad weather or simple human error.
● Flood including damage from leaking pipes, taps or bad weather.
● Frost including damage caused by frozen pipes.
● Theft or attempted break-ins.
● Vandalism.
● Accidental breakage with some policies.
Some Building Insurance policies extend to cover your garden and any outbuildings. Every policy differs, so do check the small print beforehand.
Typical things Building Insurance includes:
● Alternative accommodation while your home is being fixed.
● Fixing leaking pipes from water or heating systems.
● Addressing subsidence or landslides.
● Damage caused by falling trees on your property.
● Replacements or repairs to broken windows – either through
accident or theft and vandalism.
Building Insurance exclusions:
It’s unlikely that your provider will provide cover for any of the following:
● Wear and tear.
● Damage to outside pipes from frost.
● Storm damage to your garden gates, fences and plants.
● Deliberate damage caused by you or anyone living in your home.
● Damage caused by animals – including pets, birds and insects.
It’s possible to invalidate your policy by vacating the property for longer than 60 days or renting out your home without seeking your insurer’s permission. It’s a good idea to check with your provider beforehand if you’re planning on taking a long holiday or letting your home out while you’re away.
Should I take out Building Insurance?
Yes. Every mortgage provider insists that you are covered by Building Insurance before completing on your new home.*
*Some properties may come with buildings insurance built in and paid for through a service charge. Speak to an MMD adviser to see if you are covered.
Your guide to insurance for mortgages
Most mortgage lenders will require you to simultaneously take out an insurance policy to safeguard your (and their) investment. But, what do you need?
First-time buyer stamp duty
Good news – for properties up to £300,000 there’s a stamp duty exemption for first-time buyers.
No stamp duty for first-time buyers? Are you sure?
Well, almost. For properties priced over the stamp duty threshold, first-time buyers will have to pay the standard 5% on the remaining amount – so if your home is £305,000, you’ll only have to pay stamp duty on the £5,000 that’s over the limit.
Use our stamp duty calculator
First-time buyer mortgage calculator
This calculator is based on a capital repayment mortgage. This figure should only be used as a guide, please contact us for personal and accurate advice.
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it.
Help to Buy Mortgages
For many buyers, getting your foot on the property ladder or making the next step can be hard. With rising property prices and uncertain interest rates, it can take years to save what’s needed to even start the process of applying for a mortgage.
Luckily, there are government schemes which can help to take the pressure off. From Help to Buy Equity Loans to Shared Ownership mortgages, our experts can advise you on everything you need to know about these schemes. Simply get in touch for more information.
Talk to a mortgage advisor
What is Help to Buy?
Help to Buy is the current government initiative that’s designed to help buyers afford to buy their new home.
If you want to buy a new build home, you can apply for a Help to Buy:
Equity Loan.
What is this?
The Government will lend you up to 20% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. For your mortgage, there are certain lenders you can use who specialise. What’s more, you won’t be charged loan fees on the 20% loan for the first five years of owning your home.
You can also look at:
Shared Ownership
What is this?
Shared Ownership simply means that you own a portion of your home – usually between 25% and 75% – and pay rent for the rest. You’ll also need to part with far less upfront with a shared deposit mortgage – typically just 5% of your new home’s value.
Shared Ownership is also offered to previous homeowner who cannot afford to buy now. So, as long as your annual household income is less than £60,000, you should be accepted.
For more information about Help to Buy, visit the government website.
Gifting property with a mortgage
Gifting property to a family member is not only a thoughtful gesture, it can also bypass the need to pay Capital Gains Tax or inheritance tax further down the line. What’s more, you don’t have to wait until your mortgage is paid off to do this.
Gifting property with a mortgage is easier than you may think – you simply ‘gift’ what you’ve already paid and have your beneficiary arrange a mortgage to cover what’s left. Speak to our mortgage advisors and we’ll chat you through the nitty gritty of how this is done.
Talk to a mortgage advisor
Need some more advice? View our free first-time buyer guide
First-time buyer mortgage guide
Mortgages for limited companies
Purchasing your buy-to-let through a limited company could save you thousands in tax relief – but before you do anything, it’s a good idea to bring in the experts. Whether you want to buy property through an existing limited company or you’re looking to start from scratch, Mortgage Matters Direct can guide you through the trickier bits.
Ask us for help
Mortgages for non-standard
Properties with a non-standard construction – such as timber or steel-framed buildings – may require a specialist mortgage which can be difficult to find on your own. But don’t let this put you off. Whatever your dream home looks like, we can lend a hand with finding you a non-standard construction mortgage that won’t cost the earth.
Ask us for help
Mortgages for residences connected to a commercial property
Whether you’re looking to buy a large-scale Bed and Breakfast or a flat above a shop, you’ll likely need to find a lender who offers a particular kind of mortgage. We’ve access to more than 23,000 mortgages and will be able to advise you on which product fits the bill, based on your own unique set of circumstances.
Ask us for help
Second-charge mortgages
Sometimes your current lender won’t allow you to raise your required additional borrowing and when this happens, you may need to arrange for another lender to cover the additional borrowing. When this happens, your new lender will require a second charge over your property.
Second-charge mortgages are more common than you might think and Mortgage Matters Direct have access to some of the very best deals available.
Ask us for help
Bridging Finance
Bridging Finance can be very useful if you found the home you want to buy, but are yet to sell your current home. It can help you achieve your goals and aspirations. It can also be used when you require funding quickly and don’t have the time or the property is unsuitable for a “standard” mortgage.
You may find that you have to use other assets or collateral in order to secure the required funding, but don’t worry we have access to experts that will help you understand and decide if Bridging Finance is best for you. Bear in mind that Bridging Finance can be expensive if it isn’t used for a temporary time period. If you require long term funding then there may be better options for you.
Ask us for help
First-time buyer’s mortgage guide
As a first-time buyer, you may think that being accepted for a mortgage is more difficult for you. After all, with no collateral, your deposit is likely to be lower than average. What’s more, as a new borrower, your credit history may not be complete enough to secure a loan.
What is the ‘Energy Saving Grant’?
Find out how the Government is helping Landlord’s and Homeowners with a contribution of up to £5000 on home energy improvements.
Your mortgage matters to us.
Whether you’re a first-time buyer, remortgaging, or need specialist support, your mortgage matters to us.
How much can I borrow?
What will my mortgage cost?
What type of mortgage?
Latest mortgage best buys
Fee’s and Early Repayment Charges apply. Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it.How much can I borrow?
The salary calculator is based on Gross salary x 4.5 times salary allowed and is an indicator of what some lenders may lend. We haven’t taken into account any current commitments they may reduce this amount. This figure should only be used as a guide, please contact us for personal and accurate advice.
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it.
What will my mortgage cost?
This calculator is based on a capital repayment mortgage. This figure should only be used as a guide, please contact us for personal and accurate advice.
Your home may be repossessed if you do not keep up repayments on a mortgage or any debt secured upon it.
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Need mortgage advice?
First-time buyer mortgage
There are many specialist First-Time Mortgages available. First-time buyers may need a mortgage with lower upfront costs and a lender that understands first-time buyers – but don’t worry, we’ll help you find this. Find out more about First-time buyer mortgages.
Buy-to-let mortgage
A buy-to-let mortgage is principally underwritten from property and not your income – but with our help, it needn’t be as tricky as it seems. Find out more about Buy-to-let mortgages.
Self-employed mortgage
Being self-employed shouldn’t be a barrier to you getting your mortgage – we know the lenders that look favourably at those who decide to control their own destiny – let us help you to find the right lender. Find out more about Self-employed mortgages.
Remortgage
Whether it’s for debt consolidation or home improvements, remortgaging could be a good option for you. Speak to us to find out more. Find out more about Remortgaging
Limited company mortgage
Taking out a mortgage as a limited company may be the more cost-effective option for you. Speak to us to find out how.
Find out more about Limited company mortgages.
Let-to-buy mortgage
Need to let out your old home to afford your new one? No problem. With our in-house experts involved, you’ll have things sorted in no time. Find out more about Let-to-buy mortgages.
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18.02.2021
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