The first in our line of ask-the-expert interviews, we’re speaking to Simon Chapman, a Buy-to-Let Mortgage specialist from Direct2Mortgages.
Thank you Simon for taking the time out of your very busy schedule to answer a couple of questions on Mortgages.
PJ: Firstly, could tell us a little bit about Direct2Mortgages?
SC: Direct Mortgages began in 1989 and has grown in size since then. Our Head Office is based in Ellesmere Port and we have branches in Ellesmere Port and Sale (Manchester). We also work in Partnership with Philip James estate agents where we have mortgage advisor presence in branch. I am fortunate to be based in the Philip James Kennedy office, Didsbury Village, where my clients are a mix of residential purchasers/ re-mortgagors and Buy To Let Investors.
PJ: And how long have you worked specialising in Buy-to-Let?
SC: I have been a mortgage advisor since 2003, so just over 13 years, and have dealt with Buy-To-Let investors and mortgages throughout this time.
PJ: So, for people who are new to investing, what is a buy-to-let mortgage?
SC: A Buy-to-Let Mortgage is basically a mortgage on a property that the owner does not live in, and for which they gain an income and/or capital growth. Getting the right Buy-to-Let mortgage is important for investors to maximise the income from their property or potential purchase.
PJ: How does this differ from a standard mortgage, that everyday homeowners take-out?
SC: Buy-to-Let mortgages are normally taken on an interest only basis, as it can be tax advantageous to do it this way. Furthermore, the current methods of credit scoring are much different to those on a residential mortgage.
PJ: And can anyone apply?
SC: The short answer to this question is yes – however first time buyers looking for a Buy-to-Let mortgage will be subject to additional controls. The great thing about being a whole of market mortgage advisor is that I have the knowledge and expertise to ensure that the mortgage applied for will go through, and not be declined.
PJ: As an investor, how much could I borrow on a Buy-to-Let Mortgage?
SC: The amount that can be borrowed is generally dependent on the rental income that can be expected from the property. Some lenders place additional restrictions dependent on the property and client itself.
PJ: And what would be the minimum deposit you require?
SC: A 20% deposit is all that is generally needed for a Buy To Let mortgage, although you get more favourable rates if you can put 25% deposit down.
PJ: How long does it take for a Buy-to-Let Mortgage to be approved?
SC: Direct Mortgages has the systems and controls in place to allow mortgages to be approved the same day, far quicker than if a client approached a bank direct.
PJ: Can I apply for multiple Buy-to-Let Mortgages for my whole portfolio?
SC: Yes. This is easy to do.
PJ: If I’ve managed to purchase a property for less than market value, can I still get the full amount on mortgage to use for property maintenance?
SC: Generally No. But you can put less of a deposit in to cover any maintenance work costs.
PJ: If I own my home, can I re-mortgage the property with a buy-to-let mortgage to rent out, and use the equity for a deposit on another buy-to-let property?
SC: Yes. You can re-mortgage up to 75% or 80% of your current property’s value in order to fund the deposit on your onward purchase.
Thank You Simon for taking the time to answer our questions.
Philip James offers independent financial advice from highly competent and knowledgeable mortgage and protection advisors who are always on hand to advise you on the most suitable financial solutions. Offering whole of market mortgage advice and working independently of Philip James, our mortgage advisors always aim to offer the most cost effective mortgage and protection solutions that meet the need of their clients.
If you’d like to speak to Simon directly regarding any type of mortgages, call 0161 448 4709, email Simon@direct2mortgages.co.uk or visit Philip James Kennedy, 679-681 Wilmslow Road, M20 6RA.