Buy to Let Joint Mortgage
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Buy to Let Joint Mortgage
Diarmiud Phoenix explains how a joint Buy to Let mortgage works.
Can you get a joint Buy to Let mortgage? Can I add someone to my Buy to Let mortgage?
Yes, you can get a joint Buy to Let mortgage in the UK. It’s actually fairly common. You can also add someone to an existing Buy to Let mortgage in the UK.
That’s not as simple as just changing the names of the paperwork, though. It’s actually a legal process called a Transfer of Equity and has to be carried out by a solicitor. There’s normally a cost for doing so.
You’ll also need lender approval to do that. Without lender approval, or if they don’t allow it, you might have to remortgage to another lender altogether.
How many names can you have on a Buy to Let joint mortgage?
You can have up to four people on a joint mortgage application, but we don’t normally see as many as that. It’s not so common. Most typically you would have one or two.
What eligibility criteria do I need to meet for a joint Buy to Let mortgage?
Applicants would need to meet a range of financial, legal and property related criteria, which might include age restrictions or rules around income, credit score, whether they are UK resident or not, and existing home ownership. Some lenders will insist that at least one of the applicants is already a homeowner.
Obviously, employment is a factor as well. There’s a range of criteria even within those categories – we could almost do a separate podcast on each one of them.
How much deposit is needed for a joint Buy to Let mortgage?
25% is the usual standard minimum deposit for Buy to Let mortgages, whether it’s joint or single. Some lenders, mainly in England, will accept smaller deposits of perhaps 20%, but they are fewer and further between. In Northern Ireland, 25% has been the standard for as long as I can remember.
How much can I borrow for a joint Buy to Let mortgage?
The amount you can borrow for a joint Buy to Let mortgage will depend mainly on the rental income rather than your personal incomes. Some lenders do apply a minimum income requirement for one of the applicants, and £25,000 is typical.
Unlike standard residential mortgages, where having more than one income will mean you’ll be able to borrow more, Buy to Let mortgages use the rental yield. In that sense, there’s less benefit in having multiple borrowers.
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Can I get a joint Buy to Let mortgage if my partner is a First Time Buyer?
Yes, it’s possible to get a joint Buy to Let mortgage if your partner’s a First Time Buyer, but there are other important implications and specific criteria to be aware of.
Some lenders require at least one applicant to already own a property, for example. Some require at least one applicant to earn £25,000 or more, and a strong credit history is important.
Can I get a joint Buy to Let mortgage if I’m self-employed?
Yes, you can get one if you’re self-employed. It’s quite common and acceptable to lenders as long as you can prove your income and meet the eligibility criteria. We’ve done a separate podcast on self-employed Buy to Let which you could take a look at.
How does remortgaging a joint Buy to Let mortgage work?
When you come to the end of your mortgage deal, the same criteria applies whether you’re looking to stay with the same lender or move to a different one. It’s broadly the same process whether it’s a joint or single Buy to Let mortgage.
The only thing is if you’re trying to add somebody in, as we mentioned earlier, your current lender may not allow that – in which case you might have to remortgage to another provider.
Can I get a joint Buy to Let mortgage with bad credit?
Yes, you can get a joint Buy to Let mortgage with bad credit, but it’s usually more challenging. Your options might be limited to particular specialist lenders rather than the mainstream high-street banks.
The severity and type of bad credit also have an effect. Lenders might ask for a higher deposit. The credit profile of the other applicant will also be a factor.
How can a mortgage broker help here? Have you got any final thoughts?
Using the services of an experienced broker will always be better than doing this on your own. We know our way around the market, the lending criteria and the latest deals, so we can certainly save you time, money and effort in finding the right Buy to Let mortgage.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS.
THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST BUY TO LET MORTGAGES.
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