Getting a buy-to-let mortgage can be a lengthy process, but it doesn't have to be. On average, it takes between two to four weeks for the mortgage offer to arrive. After that, the entire process can take up to 8 weeks, depending on the property and other variables. Remortgaging is much faster and can be completed within 6 weeks.
The period between the exchange of contracts and the end date depends on both the buyer and the owner. Once both parties have agreed on a date, 1 week will elapse from then on, as this is how long it will take for them to receive the funds once your lawyer has notified your lender. It usually takes about a month from the exchange of contracts to their completion. Consumer BTL mortgage counseling, organization, lending and management are covered by the same laws as residential mortgages and are regulated by the Financial Conduct Authority (FCA).
If you're buying a property for a close relative, you'll need to apply for a regulated buy-to-let mortgage, which means that the FCA imposes slightly stricter guidelines. It's also possible to allow tenants who buy to rent to sublet to ensure that rental income is received during cancellation periods. At the time of writing this article (August 2020), it is possible to obtain a purchase-to-rent mortgage with an initial rate of less than 3%, but at the other end of the spectrum, it can range from more than 6% for higher-risk agreements. In addition to the fact that the owner of the property cannot be a permanent resident there, the main difference between a purchase-to-rent mortgage and a residential mortgage is the way in which affordability is evaluated. They are generally offered in situations where the landlord rents to a close relative, or when the owner of the property is classified as an “accidental landlord”, since he has inherited a buy-for-rent opportunity. Talking to a purchase-to-rent mortgage specialist before you apply will increase your chances of finding the right lender the first time, and that could mean saving time and money. Most buy-to-rent mortgages in the UK only pay interest, and the landlord pays the monthly interest with rental income.
To find one of these lenders, the best thing to do is to apply through a purchase-to-rent mortgage broker who knows the market. Some brokers charge 0 pounds sterling, others up to 4% of the loan amount to process the mortgage on your behalf. If you've been paying a residential mortgage for a while, you may be able to remortgage to free up capital and use it to buy your first rental purchase.
