Have you been wondering how to get a mortgage for your rental property? To start your property investment journey there is a high chance you will need a buy-to-let mortgage. Getting a mortgage can seem daunting at first, but this blog will break it down into four simple steps. It will also highlight points to consider that might make obtaining a mortgage more difficult.

Step 1:  

The first step is to apply for a Decision in Principle (DIP) from a lender. A DIP is a document that states how much the lender is willing to lend, typically after running a soft credit check on you, and collecting some basic financial information.

Step 2: 

With a DIP in hand, although it is not legally binding, you can have some assurance of what your borrowing cost is and how much you can borrow, and can start looking for properties within your budget.

Step 3:  

Once you have found a property, you will be able to apply for a mortgage offer. A mortgage offer is a formal agreement from the lender to lend you the money to purchase the property.

Step 4: 

Once you have a mortgage offer, the final step is completion. Using the lender’s solicitors might help speed up the process, and decrease the number of parties involved in the transaction.

Things to consider when applying for a buy-to-let mortgage

There are a few instances where the process will be made more difficult. Non-UK residents may face issues as not all lenders will lend to them. First-time buyers may also face challenges, especially if they have little or no credit history. Portfolio landlords, those who own four or more mortgaged properties, may also find it difficult to obtain a mortgage due to recent regulatory changes.Those purchasing an HMO, or house in multiple occupation, may also find it difficult to obtain a mortgage due to the increased risk involved.

It is also good to note that the documentation required to obtain a mortgage offer may also be extensive. Lenders may ask for bank statements, proof of income, and proof of identity. This is a standard procedure as banks have to meet Know Your Customer (KYC) and Anti Money Laundering (AML) regulatory requirements.

We can make your buy-to-let mortgage journey easier

Find out in a few seconds with our buy-to-let mortgage calculator how much could you borrow to purchase a property in your own name vs through a limited company. When you're ready, GG Mortgage we can provide you with support from start to finish when getting your mortgage, and even give you a panel of lenders to choose from.