Get mortgage fit and invest wisely

With more people choosing to grow their finances in buy-to-let properties, one of the country’s leading housebuilders says getting mortgage fit will help potential investors sail through the buying process.

Barratt is providing information and advice that is designed to help investors secure specialist mortgages, allowing them to let their new assets for potential medium and long term profit.

The five star housebuilder currently has a number of homes in the Exeter area suitable for investors. Developments locally include Rydon Place and Hillside Gardens.

“With a growing number of tenants seeking new homes to rent, more investors are turning to property,” said Adrian MacDiarmid, head of mortgage lender relations at Barratt.

“In some respects, obtaining a mortgage for this purpose can be easier - but you should still consider whether it’s the right thing for you. Generally speaking, you’ll need a 25 percent deposit - but this does vary from lender to lender.

“Sometimes you may even be able to proceed with less than that. Either way, there are some further steps you can take to help make sure you are mortgage fit.

Clean credit record

You’ll almost definitely need one of these.

It is important to know about the information others can access about your financial situation. You can find out online with the two main credit reference agencies; Experian and Equifax. Check that all of the details are correct. If they are not, you can request that the agencies make changes, by writing to them. Knowing your score from the off is crucial. If it’s not as impressive as you would like, you can take positive steps to improve it.

Get on the electoral roll

If you aren’t already, register for the electoral roll as you’re unlikely to get credit without it. Also if you can, provide information such as a landline number rather than a mobile number.

Be an existing homeowner

Most buy-to-let investors already own a home - and having equity in your existing property is attractive to those who are deciding whether to offer you further funds. It is helpful to be in this position - but first time buyers are not always dismissed out of hand.

Income to cover existing commitments

You must be able to show that you have the finances coming in to pay for your living expenses - and everything you’re already contracted to pay for.

Do your homework

Show your lender that you’ve researched the market and are aware of the rental income you expect to receive from your investment property. This will help them work out how much they can lend you. It also shows you are serious and understand the importance of this new commitment.

“If you don’t meet all these criteria, that doesn’t mean you’ll definitely be turned down,” added Adrian. “First time buyers and those who may have missed one or two payments in the past - perhaps on credit cards or utilities - may still be able to obtain a buy-to-let mortgage.

“In all cases, taking expert and independent advice is crucial. We are able to introduce potential investors to an adviser who will look at their individual circumstances and take them through all the available options.

“This is an excellent time to buy and rent new-build properties - and we are expecting the popularity of this type of investment to continue rising as more and more people choose to grow their money in our homes.”

For further information Barratt has produced a series of videos for investors at https://vimeo.com/124697594 and https://vimeo.com/124801576.