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The process of a BUY TO LET purchase
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Mortgages made simple is a marketing website and not a lender or a broker. It does not sell or recommend mortgages.
Buy to Let mortgages are not regulated by the Financial Services Authority (FSA).
1. Work out the deposit available. You can only borrow 85% loan to value, so your deposit will determine your price range. 2. Get advice from a local estate agent about types of property most likely to be let in the area and the level of rents paid. 3. Research mortgages and apply for an acceptance in principle if you spot a deal you want. You will be expected to produce expected rental income plus salary details, Lenders will expect the rental income to cover 125% of the mortgage. 4. Put an offer in on the property you want. Once it has been accepted, commission a valuation. 5. If the property is old you should commission a Homebuyers Report or full structural survey. 6. Instruct your solicitor to carry out the purchase and provide them with details of the property, the estate agent, seller and your lender. 7. Lender receives valuation report and, if all is in order, agrees the mortgage. 8. Solicitor carries out local authority search and confirms legality of title. 9. Pay the deposit, sign and return the contract and the solicitors will exchange contracts. You are now legally committed to the sale. 10. If the property is freehold you must get adequate Buildings Insurance immediately. 11. Get any quotes for building or renovation work and decorating that may be necessary. 12. On completion day call the seller's estate agent to pick up the keys. The property is yours to let. 13. Get the builders and decorators in as soon as you can. Advertise for tenants just before the work is completed. (Or engage the services of a letting agent to do this for you). 14. Arrange to meet prospective tenants and show them the property once it is ready. 15. If you find suitable tenants arrange for them to supply you (or agent) with employer, bank and personal references. Check these. 16. Get a deposit of one month to six week's rent to confirm the tenancy. 17. Make last minute check that the property meets health and safety requirements and write a comprehensive inventory. 18. Draw up a tenancy agreement. 19. Contact utility companies and the council to arrange for bills to be transferred to tenants' names. 20. Hand over the keys. |