ALL YOU NEED TO KNOW ABOUT BUY TO LET MORTGAGE COMPARISON

When you’re comparing buy to let mortgages online, how do you know you’re getting the best deal? There’s so many mortgage offers out there that it can sometimes be difficult to work out the best one for your particular situation. Whether you already own a rental property or are looking to buy one, it always worth comparing buy to let mortgage deals. We’ll show you what you need to know when you’re doing a buy to let mortgage comparison

    

TRY AND INVEST IN AN AREA WITH PROMISE

Buying property in a hotspot will work out expensive. But find an area that is attracting new businesses and has potential, and you could find your property value shoot up over the next few years.

Look out for LENGTH OF TERMS

Don’t be seduced by the remarkably low two year fixed rates, while beneficial in the short term, in year three, the financial situation could look a lot different. If you do find a decent five year fixed rate, it might be a good idea to go for longer term – as it gives you the reassurance that at least for the next five years, you’ll have a good idea of costs.

SHOP AROUND

Walking into the bank you’ve always been with and asking for a BTL mortgage is not financially savvy. Do you work, speak to a broker and check out ALL options before you commit.

OUR EXPERTISE

THE MAJOR THINGS TO CONSIDER THAT WON’T COME UP ON A BTL COMPARISON SITE

Some of the most important things to consider before investing in property will not come up on a buy to let mortgage comparison site. You’ll get the rates, terms and monthly costs, but there are some incredibly important factors which should influence your decision.

COST

And we are not just talking about the cost of repayments. You need to think how much wriggle room you need to cover the cost of boiler repairs, roof repairs, property management fees and so on.

SETTING UP A LTD

Setting up as a limited company could be a good idea if you are running your property portfolio as a business, but possibly not worth considering if you’re managing one property.

TAXES

Speak to a financial advisor on the huge tax bills that could possibly come your way from stamp duty costs to capital gains tax. It’s also vital to work out if you’re eligible for any relief.

"Hip has incredible potential. It brings accessibility and transparency to the property market for owners, occupiers, investors and developers, and allows them to take control and leverage the balance of their debt to equity to their own advantage."

Paul Danks,

Newmark Grubb Knight Frank

HiP as buy-to-let alternative

HOW HIP HAS TRANSFORMED BUY TO LET MORTGAGES

It’s becoming increasingly difficult to run a successful portfolio as the government introduce more legislation to cut tax relief and the Bank of England base rate goes up. Landlords have experienced some of the most difficult years for managing property, so it’s important to know your options.

WITH HIP, YOU CAN ACCESS THE EQUITY TIED UP IN YOUR HOME

We can turn what was diminishing returns into a much easier and less risky investment opportunities where there is access to funds if necessary. With HiP, you can access as much or as little of your equity as possible. Equity in your home can supply the deposit needed for your buy-to-let mortgage for example.

We will help you turn your property portfolio into a flexible bank account

This means you can take out what equity you need from your existing property to put towards a deposit – all without selling or going through a lengthy remortgaging process. You can also open up your new house onto the HiP exchange and trade equity with a network of investors. Which means you could buy a property that the traditional mortgage lenders deemed out of your price range.

All this without losing ownership of your property

HiP is all about unleashing your property wealth, and when you can do this, being a landlord suddenly becomes a whole lot easier.

HOW YOU BENEFIT WITH HIP

HiP is the NEW Way
to finance property

HiP Property: Our Aims

Reinvent the way you look at property investment

HiP is hugely beneficial to property owners, changing the way we can use bricks and mortar into something with far more fluidity than ever before. It is a debt and equity exchange, with investors all over the world interested in putting their money into property.

Turn Your Property Into a Bank Account

For you, this means a democratised property market; withdraw money from equity without moving, borrowing or losing ownership, use your equity to cover your monthly mortgage repayments, or trade your equity against your mortgage.

Flexibly in the high-yield property markets without limits

We allow you to do all this, and much more, without the penalties, costs and charges that a traditional lender would impose. Whatever your property investment or finance needs may be, HiP is on hand to help you take your next step.

HiP is regulated by the FCA

HiP UK will be regulated by the FCA*

And have an agreed licence for trading in the UK and Europe. *As we go live these permissions are being reviewed.

HiP is based in London

HiP UK is based in London.

HiP's 20+ staff operate from Camden, London. With registered address in Bristol.

HiP is award winning

HiP is award winning

We have won an awards and been shortlisted for more. We came second in the worldwide PropTech Innovation Awards and as Bronze in the Digital Impact award 2017 for “Best use of digital by sector”.

Register your interest

Just fill out the form on this page now, and you’ll be the first to find out about HiP, which we are busy creating. We can’t wait for you to join the property revolution.

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Frequently Asked Questions

WHAT IS THE LAW AROUND UK BUY-TO-LET MORTGAGES?

It’s well worth finding out about the rules surrounding buy-to- lets before you make the decision to apply. Borrowers are subject to more stringent ‘stress tests’ on their buy to let mortgage applications. According to the Bank of England, this is in a bid to reduce irresponsible lending. Lenders will review your entire portfolio when making a decision on one mortgage application. This has caused problems with those landlords who may have one or two properties underperforming, profit-wise. Even if the rest of your portfolio is more than making up for this small shortfall, it could be detrimental to your mortgage application.

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CAN YOU LET A PROPERTY IN THE UK WITHOUT A BUY TO LET MORTGAGE? WILL THE BANK FIND OUT?

If you own a property and rent it out, it is advised that you inform your mortgage lender as soon as possible about this change in circumstances.
Renting out your property on a standard mortgage will be infringement of the legal conditions of your contract, and you could face severe consequences.
Since 2013, banks and lenders have been chasing ‘accidental landlords’ and checking any properties which have been advertised on the rental market without their consent.
Letting your lender know about your wish to let to a third party is easily arranges, and will require you to obtain a ‘consent for lease’ document from your bank.

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CAN I GET A BUY-TO-LET MORTGAGE WHILE I HAVE BAD CREDIT?

They will usually demand a larger deposit and potentially higher rates. It is usually easier to obtain a buy to let mortgage with a less than gleaming credit score than a standard mortgage as you will be covering the mortgage repayments with the rental yield.
However, HiP allows borrowers with bad credit to get on to the buy-to- let ladder far more easily than most traditional lenders.

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How does a buy-to-let mortgage work and are they good?

A buy to let mortgage traditionally works by calculating the rental yield of a property to see if its workable with the mortgage repayments. Once the agreement has been worked out, you’ll pay a deposit to secure the mortgage. During this time, you will find tenants that can fill the property, ideally credit check them and get them to sign a tenancy agreement. They will then cover the cost of the mortgage repayments each month. To make it worthwhile, there should be extra, normally 25% extra, for you to use as profit or invest back into the house on any repairs.

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In the UK, if I get a mortgage, how long do I have to live in the property until I can rent it out?

Depending on the terms and conditions of the mortgage, you can rent the house out at any time. However, some lenders will refuse point blank to change a particular mortgage deal into a buy-to- let, so it is important to read the small print and discuss the possibilities when you take out a standard mortgage.

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Can I buy a property on buy to let and rent it to myself (UK)?

Depending on the terms and conditions of the mortgage, you can rent the house out at any time. However, some lenders will refuse point blank to change a particular mortgage deal into a buy-to- let, so it is important to read the small print and discuss the possibilities when you take out a standard mortgage.

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Is it better to get an interest only or repayment mortgage for a buy to let property?

Most landlords will choose an interest only mortgage over a repayment mortgage for their buy to lets.
The main reason for this is that landlords invariably see their properties as long term investments.
Interest-only mortgages are also flexible and tax-efficient – even though the tax rules on buy to lets is changing.

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The tax regulations around buy-to-let mortgages in the UK changed last year. Is it still profitable to do buy-to-let?

Profound changes to the way buy to let mortgages work have dramatically altered the livelihoods of a lot of property landlords. In 2017, changes to the law made it no longer possible for higher rate taxpayers to offset all their mortgage interest against rental income before working out what tax they owed. This led to higher tax bills, even if their income had not changed.

This is being phased through to 2020, where it will be replaced by a 20 percent tax credit.

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What do banks look for to approve an applicant for a buy to let mortgage?

Banks and lenders will look at a number of things when approving you for a buy-to-let mortgage. These include:
Your credit score
Your income
Your spending habits
Any criminal records

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Can You Get Buy To Let Mortgage As First Time Buyer?

While it’s totally possible to have your first mortgage as a buy-to- let, most lenders prefer borrowers who have had a standard mortgage prior to taking on a buy-to- let mortgage.
If you are approved, you will have to prove that you are not living in your own buy-to- let, and you will also have to pay a bigger deposit and higher rates than a standard mortgage.

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How are repayments calculated in a buy to let mortgage?

Repayments on a buy-to- let all depend on how much you’ve been approved to borrow. Your mortgage will be based on the amount of rental income that the property can expect to bring in.
Repayment amounts will differ from lender to lender, depending on the mortgage deal, but it will be calculated by working out the value of the house and the expected monthly yield from rent.

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6 Bayside Road, Gibraltar, GX11 1AA.
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HIP INTERACTIVE PROPERTY UK LIMITED is registered in the UK, and adheres to The Standards of Lending Practice.

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