Not too many years ago lenders just assessed buy to let mortgages on the basis of the property and paying little regard to the applicants income situation. This meant that housewives, students and other applicants could obtain an investment property as long as they had a suitable credit status and a decent deposit. Many lenders now have a minimum income or affordability check their applicants. Luckily there are still some lenders who can assist in some situations and these are discussed below. Some applicants would consider this to be Self Certification buy to let – the important point here is that it’s not true self certification. The lender will assess your case and income details but they just have either a low or zero minimum figure that is required to obtain the mortgage.
Housewife Buy to Let (and husbands!) Who Own Their Home but Have no Income
It may not be beneficial for various reasons (not least the tax implications) for a husband and wife team to buy their buy to let properties in joint names. This is often especially true if one party to the marriage is a higher rate taxpayer and the other is staying at home on no income to care for the family. In this case The Mortgage Works is currently able to accept applications for housewife buy to lets, unemployed buy to let mortgages etc as long as they have owned their property for 6 months or more and can demonstrate a suitable credit history.
Applicants With Low Incomes
Many lenders now can consider cases where there is a low income on a common sense basis. A first time buyer for example with an income of 15,000 would have little difficulty affording a residential property with a mortgage of 60,000 say. NatWest understand the common sense in this and as long as it also stacks up from a rental perspective they will even allow a first time buyer with an income way below the typical minimum lenders have of 25,000 to purchase a buy to let property. They are not alone – others such as Cambridge can help too.
For applicants who are not first time buyers there are additional lenders who may assist – this is because owner occupiers are seen as more stable in their personal financial circumstances and pose less of a risk to lenders. Many smaller building societies (Marsden, Hinkley and Rugby and Cambridge to name three) would consider an application from someone with a low income.
As you can see there are a number of options other than the old self certification buy to let mortgages which enable housewife buy to let and even buy to let mortgages for the unemployed and those on low incomes available even in today’s tough borrowing market. If you’re not sure where to go or which lender you might qualify with complete the short form below.
Why Would An Applicant Purchase a Buy to Let Before Their Own Property or If They Have a Low Income?
One of the main appeals to investing in property is the perceived long term value and importance in our culture and society of owning property. It’s not necessarily a stretch as the rent will often cover the mortgage and make a small profit allowing people on low incomes to benefit from owning the property without stretching their finances.
Some families are simply looking to expand their existing investments away from traditional bonds and stocks and add some tax efficient buy to let property in the non-earner’s name. Clearly this has no negative impact on their financial situation if between them they have a comfortable amount of income entering the household and are prudent with their financial goals and planning.