Self Certified Buy To Let Mortgage
Self Certified Buy To Let Mortgage | Passport To Investment?
Who would need a self certified buy to let mortgage?
If you fancied a crack at becoming a landlord but have become self-employed in the last three years, it can be difficult to qualify for a standard buy to let mortgage. This is also the case with borrowers who do not receive 100 per cent of their income through traditional means or from just one single job.
For example, you could receive dividends through shares in a company, or an annual bonus through a career in retail or banking. Perhaps a significant part of your salary comprises of commission, as is the case with a sales executive or travel agent? Or you may be holding down a second job - which could be anything from dog walking to baby sitting - that allows you to earn extra cash from home. It's cases like these where a self certified buy to let mortgage comes in as, although you will still need to show the lender some indication of your income, lending will be on more flexible terms.
The number of would-be landlords who could benefit from a self certified buy to let mortgage is growing. According to the Office for National Statistics' Labour Force Survey, in quarter one of 2007, there were in excess of 3 million (3,337,000) self-employed workers in the UK and numbers are rising. And, according to figures from the Council of Mortgage Lenders (CML), there were 171,800 buy to let loans taken in the first half of 2007 compared to just 119,000 taken in the first half of 2004 - despite in rises in interest rates during that period.
What other criteria are there for a self certified buy to let mortgage?
As well as the need to satisfy the lender that you are in receipt of a minimum income before qualifying for a self certified buy to let mortgage, you will also need to show that the rental income of the property you want to buy, amounts to between 125% and 150% of the interest portion of your mortgage repayment - although some lenders will be more flexible if the sum is calculated on a higher 'assumed' interest rate.
You will also need to be armed with a deposit of between 15% and 25% for 
your self certified buy to let mortgage, depending on your income. However, some buy to let lenders now require as little as 5%. A mortgage broker, like TMBL, that knows the market, can point you in the right direction according to your circumstances.
How easy is it to get a self certified buy to let mortgage?
Once all these boxes are ticked, getting a self certified buy to let mortgage through a mortgage broker familiar with the area, is a piece of cake. But, before you sign on the dotted line for your self certified buy to let mortgage, you will need to have considered potential void periods, which average 27 days a year according to the Association of Residential Lettings Agents (ARLA). You should also research the government's Tenancy Deposit Protection (TDP) scheme, launched in April 2007 and get to grips with the new laws on Houses of Multiple Occupancy (HMOs).
*In general Buy-to-Let mortgages are not regulated by the Financial Services Authority.
