Buy To Let Mortgage For The Self Employed

Everything you need to know about getting a Buy to Let Mortgage for the Self Employed.

You voluntarily choose to provide personal details to us via this website. Personal information will be treated as confidential by us and held in accordance with GDPR May 2018 requirements. You agree that such personal information may be used to provide you with details of services and products in writing, by email or by telephone. By submitting this information you have given your agreement to receive verbal contact from us to discuss your mortgage requirements

Can I get a buy to let mortgage for the self employed?

We are specialists at getting Buy to Let mortgages for the Self employed. You can absolutely become a Landlord when you’re self employed.

When you are self employed, instead of proving your income with payslips, you use your accounts. So as long as you have at least one year of accounts you should be fine. Even if you don’t there may be options!

What income do mortgage companies look at for a buy to let mortgage for the self employed?

Generally lenders will want to see your latest years tax calculation and tax year overview, most will want 2 years worth. You can find out how to get these here.

How many years of accounts do I need to show for a buy to let mortgage for the self employed?

Usually you’ll need at least one, possibly more. It’s best to speak to a mortgage broker who specializes in Buy to let mortgages for the self employed and can assess your situation. You can find an article on this here.

Understanding accounts

With an employed person you know their employer is going to pay them a set amount (Usually) each month, and we can evidence this with Payslips. For a self employed person they only file accounts once a year, so lenders can only see their income usually for last year sometimes it can be 18 months since they filed their accounts.

So to get an understanding of how they are doing year on year they tend to ask for more than one years worth. At Albion Forest mortgages we have access to lenders that require one, two or even three years worth, so depending on your situation we can find the right lender for you.

The reason for a buy-to-let mortgage for the self employed

This may sound obvious, but you are getting a buy-to-let so you can make money. You are going to rent it out to pay the mortgage.

Lenders know this too, which means your income isn’t as important as it is for a residential mortgage.

Buy to let deposits

This is definitely something you need to consider. Buy to let mortgages have higher deposit requirements, usually 25% of the value of the property.


You can either get this from savings, pull it out of your own home’s value, or any number of other ways to buy your buy-to-let.

What documents will you need?

This depends on the lender and type of mortgage, but generally you will need proof of income (Payslips, or accounts if you’re self employed), an Assured Shorthold Tenancy Agreement if the property is already let, Bank Statements, and Proof of ID. 

You will also usually need some form of proof of deposit or equity. You may require more documents depending on your application. Don’t be surprised or worried if your bank or broker comes back to you to ask for more documents, it’s quite normal.

How does a buy to let mortgage for the self employed work?

You probably already have/had a residential mortgage if you are considering a buy-to-let,  but there are some key differences between them.

  • Lender fee’s tend to be higher on buy-to-let mortgages.
  • Interest rates are usually higher.
  • Your deposit required is usually bigger compared to residential mortgages, usually 20-25%
  • Usually a buy to let mortgage is interest only, meaning you only pay the interest each month, and then at the end of the mortgage you repay the full balance.
  • Unlike residential mortgages, for the most part Buy-to-let mortgages are largely not regulated by the FCA.
  • You pay an additional 3% Stamp duty for second properties.

How much can I borrow for a buy-to-let mortgage?

Unlike residential mortgages, usually buy-to-let mortgages are calculated based on the rent you will receive from the property. Most lenders will want to see the rental income be 25%-30% more than the monthly payment, but there are calculators available to work it out depending on the lender, and some other factors.

Things to remember:

  1. Income from your Rental properties is liable for income tax, and you should submit a self assessment tax return for the year it is earned in.
  2. There may be Capital gains tax payable if you sell the property.
  3. Your Stamp Duty liability is usually higher for second properties, and as I mentioned earlier you probably have a property already if buying a buy to let.
  4. You’ll usually need Landlord insurance or Building insurance if you own the Freehold.

What is a Let-to-Buy mortgage?

Let-to-buy is when you rent out your existing home and buy a new one to live in. Your existing property becomes a buy-to-let and you get a new residential mortgage. There is a lot to consider with this, such as:

  • Do you want to be a Landlord?
  • There are additional costs such as additional stamp duty, potential capital gains on sale of property.
  • Additional solicitors costs

A Let to Buy mortgage may be the right fit if you:

  • Are in a hurry to move and you can’t sell your current property
  • You have struggled to sell your current home
  • You want to buy with a partner but don’t want to give up your ownership on your current property
  • You’re moving temporarily and intend to move back in the future.

Let-to-buy vs Consent to let

It may be more beneficial if you are only planning on renting the property for a short period before selling it or moving back in to ask for ‘consent to let’, essentially just asking permission to rent it out.

Can I get a buy to let mortgage as a Youtuber?

Absolutely! As a youtuber your career may be new and exciting and lenders may not quite get it yet, but I specialise in this type of mortgage. We’ve got a whole article on this here

As an Actor can I get a Buy to let mortgage for the self employed?

Absolutely, we specialise in this so there is an article for you on this here.

Can I get a but to let mortgage for the self employed with bad credit?

Yes, absolutely! We have an article on bad credit here, and you can check your credit file at www.checkmyfile.com.

 

Got a question we didn’t answer? Maybe we answer it on our main Self employed page, if not get in touch!

More Self Employed Articles

First Time Home Buyer Self Employed Mortgages

Mortgages For The Self Employed With 1 Years Accounts

Youtuber Mortgages

Actor Mortgages

Company Director Mortgages

Mortgages For Dentists

Sole Trader Mortgage

Checkmyfile

Why Albion Forest?