Buy to Let Self-Employed Mortgage

What should self employed applicants consider when purchasing a Buy to Let property?

Well, it’s the same if you’re employed or self-employed. If you purchase a Buy to Let property and your tenant doesn’t pay for whatever reason, you’re liable for the monthly mortgage payments. You should always consider whether you can afford to make those payments if you have to.

That’s really, really important for a self-employed person because obviously you’re generating their own income. In the event that you’re sick or something’s happened to your income, you’re still expected to make the payments if the tenant doesn’t pay.

Should I Buy to Let as an individual or through a limited company?

We would direct a client back to their accountant because this is a tax area. Speak to an accountant before making a decision whether to buy in your own name or through a limited company.

There are quite different rules and regulations with regard to the tax. We can’t give you advice on that as mortgage brokers – we’re led by the client and their accountant in terms of which route is going to suit that individual.

Can I still get a Buy to Let mortgage if I only have one year of accounts?

Potentially there will be lenders that can have a look at that, because they don’t always look at your income. I’d still be very cautious. If you’re a newly set up company, again, you’ve still got to make the monthly repayments if the tenant doesn’t pay.

It can be very difficult if you have to ask a tenant to leave. It’s quite a timely and costly process, so you need to be able to afford to make those payments.

What is top slicing?

If we do a calculation and we’re a little bit short on rental income to get the mortgage needed, we can also look at the client’s actual income to top up the difference.

It’s looking at your surplus income to reach the mortgage you require. This often happens when someone is remortgaging and we can’t do it on a like-for-like basis. It’s another route to allow the mortgage to proceed.

What are the tax implications when it comes to Buy to Let mortgages for the self employed?
Again, this is where I’d recommend you speak to an accountant to find out exactly what you’re getting into when making a purchase for a Buy to Let.

Because it’s not a residential property, there are different tax implications. Ask your accountant about the pros and cons of what you’re going to do, and what tax implications there are for you.

Can I remortgage a Buy to Let if I’m self employed?

Yes, you can remortgage if you want to. Being self-employed is no problem at all. Again, lenders will just look at your circumstances. They may want to see your income – it just depends on the lender.

Can I still get a Buy to Let mortgage if I have bad credit?

Yes, there will be lenders that may look at that for you. It depends on how your credit file is looking. Sometimes it will mean the interest rate is slightly higher, so the monthly cost is going to be impacted because of your credit file.

It’s good to get your credit report and show it to your broker – we can have a look and use that as a guide moving forward.

How long is the Buy to Let mortgage application process? Are there any differences if you are self-employed?

It may take two to three months to go through, maybe less. It just depends on the lender getting the offer done quickly and then how fast the solicitor does all their legal checks.

If you’re self-employed, lenders may want to look at your tax information. It shouldn’t really take too much longer than if you’re employed, especially as we can find lenders that aren’t too worried about your personal income.

How can mortgage advisers help self-employed applicants get a Buy to Let mortgage?

If you come and use a broker, we can guide you through the process. We’ll find the most suitable provider for you and make sure your needs are being met.

We liaise with the lender for you, help you with the legal paperwork if required, and just guide you through the process.

Just find a broker that suits your requirements and make sure that you’re happy with the process. Get your paperwork lined up. Sometimes people come to us and they haven’t done their tax returns, so they have to get them done first before we can help them with a mortgage.

Whether you’re doing a Buy to Let or it’s for your own personal mortgage, having your bank statements ready and making sure that those – and your ID – have the right address helps smooth out the process. If all the paperwork is up to date and correct, that will avoid any delays in the process.

YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.

SOME BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.