A Birmingham Midshires Buy To Let Mortgage is a mortgage on a property with the intention of renting the property out to tenants, as opposed to the owner living in the property themselves.
The UK-based bank Birmingham Midshires is a division of the Lloyds Banking Group. Savings accounts, mortgages, and similar financial solutions are its areas of expertise. BM has a heritage dating back to 1986 when it came about through the merger of Birmingham-based building societies. Birmingham Midshires joined the Halifax Bank in 1999, and in the end, Halifax and Bank of Scotland amalgamated to establish HBOS. In 2009, Lloyds Banking Group purchased HBOS, converting Birmingham Midshires into a Lloyds subsidiary.
When looking for a buy-to-let mortgage, there are some important factors to consider:
Deposit: You will usually need a larger deposit for a buy-to-let mortgage than you would on a residential mortgage. Lenders often require a minimum deposit of 25% of the property value, although this can vary dependant on other factors such as rental income.
Rental income: When calculating affordability, lenders will use the rental income the property will receive rather than your own personal income to decide how much they can lend . As a general rule., lenders expect the rental income to be 125% to 145% of the mortgage repayment.
Interest rates: Buy-to-let mortgage interest rates tend to be higher than residential mortgage rates. The actual rate will depend on factors such as the loan-to-value ratio, your creditworthiness, and the lender's criteria.
Fees: Costs associated with a Buy To Let Mortgage include and are not limited to product fees, valuation / legal fees and broker fees. There are options with no product fees and you can find a mortgage broker who charges zero fees. If you are looking for a buy to let remortgage, then there are options with Birmingham Midshires that also come with a free valuation and free legal service, meaning your costs could be minimal to remortgage.
It's important to remember that buy-to-let mortgages are subject to specific regulatory requirements, and product and term availability may change. For comprehensive and current information based on your unique situation and location, it is advised to speak with a mortgage advisor or a financial institution.
What is the criteria for a Birmingham Midshires Buy To Let Mortgage?
- Applicants must own or have owned a property in the past
- There is no minimum income requirement
- Property rental income must pass affordability stress tests
- Applicants must be between ages 21 - 75
- Maximum Loan-To-Value is 75%
- Property will be subject to valuation and surveyors comments and cannot be a multi-let (MUB), Holiday Let or Ltd Company application
- HMO's are accepted
- Minimum Loan Size is £25,000 and Minimum Property Value is £50,000
- Tenancy agreement must be for minimum 6 months contract
- Property must be let to individual not related to applicant (Regulated Buy To Let)
What types of deposits are accepted?
If you are wanting to purchase a BTL and gain a Birmingham Midshires Buy To Let Mortgage , you deposit must be from funds from an eligible and acceptable source to be successful in securing the mortgage. List of authorised sources include:
– Own personal savings / funds
- Gift from direct family
- Builders deposit
- A loan from close relatives
- Mortgage on an additional property
Should I use a mortgage broker to arrange my Birmingham Midshires Buy To Let Mortgage?
Birmingham Midshires Buy To Let Mortgage products are not available by going direct to the lender. Instead, their BTL mortgages are only available through an independent broker. You may gain from the services of an independent mortgage adviser whether you're searching for your first rental property, refinancing, or growing your portfolio of investment properties. A good mortgage adviser can offer you impartial advice throughout the process, compare across all lenders to get you the best rate and streamline the process by taking on all of the legwork from yourself the applicant by liaising with the lender on your behalf and ensure the application goes through as smooth as possible.
Mortgage brokers can also give you access to the whole of the UK market's mortgage products, lenders and interest rates than you might find through searching yourself. They can help you compare possibilities and maybe locate more attractive terms than with Birmingham Midshires. Mortgage advisers are educated about the mortgage market and can provide advice throughout the process. They can discuss different mortgage varieties, help you understand the terms and conditions, and provide advice tailored to your financial situation. Although mortgage brokers are frequently compensated by the lenders they work with, some may impose additional fees on the borrower directly. It's crucial to understand any fees up front and to weigh the potential advantages against the expense.
Birmingham Midshires Remortgages
Birmingham Midshires offer some of the most competitive Buy To Let remortgage rates on the UK market. Whether you're a landlord with your first investment property that is coming to the end of a fixed term or you're a portfolio landlord with a large portfolio of buy to lets, Birmingham Midshires offers a full range of remortgage products for you to move your mortgage to themselves. There are certain unique rules for buy-to-let mortgages, however the procedure is similar to remortgaging a residential home. Please see a step by step guide on how best to prepare for remortgaging your mortgage to Birmingham Midshires:
- Examine the terms of your current mortgage, including the interest rate, the method of repayment, and the outstanding balance. Recognise any exit fees or early repayment penalties that may be imposed.
- Analyse your expenses, rental income, and any increases or decreases in property value since you last applied for a mortgage. Think about your remortgaging objectives, such as releasing equity or lowering monthly payments.
- Think about speaking with a buy-to-let mortgage specialist mortgage broker. They can offer professional guidance, aid in the application procedure, and guide you through the market. If you are definitely wanting to proceed with a Birmingham Midshires Buy To Let Mortgage, you will need to speak to an independent broker anyway, as they don't offer products directly to consumers.
- Evaluate affordability. Lenders determine whether buy-to-let mortgages are affordable based on the rental income of the property. The rental revenue may need to be more than a specific proportion of the mortgage payment, which is known as a minimum rental coverage ratio. Be ready to show proof of your rental income.
- Request a new mortgage: Send your loan application to the lender of your choice. Give precise information and finish the necessary forms. As part of the application process for new customers, be ready for a credit check and property valuation.