Self Cert Buy to Let with No Income

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.

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.

HMO Mortgage Criteria and Requirements

• An HMO Mortgage will require a property occupied by at least 5 or more people, or
• A property with at least 5 to 7 lettable rooms in a general living area, or
• Having more than one tenancy agreement in place

There are many things to keep in mind as a landlord wishing to deal with HMO Mortgages.

Lending Criteria for HMO Mortgages in UK

When considering lending, most banks and lenders will want to make sure that you not only have an appropriate credit score, but also the funds and assets to back up the purchase of another property. Additionally, the property in combination with your own cash flow (as proof of income) must be able to meet the monthly payments to a secure a mortgage. It is always best to secure proper advice from a lender before making any rash decisions. Also, keep in mind that you may have to pay any lending and closing fees out of pocket, but each situation is different for different types of borrowers, especially if you’re looking for buy to let with no income.

Types of HMO Morgages

Typically, you will find two different types of mortgages for HMO purposes; fixed & variable. Below is a table of approximate terms for both fixed and variable mortgages, and typical associated lenders fee.