Buy to let with limited income

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We visited a client who was wanting to start and build up a buy to let portfolio. *

He had completed his own research and he felt this was good for him and he could make some money from the rental income. The main issue was his income. He had been left some money from an inheritance and the deposit was in place but his research showed lenders need a minimum of £25,000 as an income before they would allow a buy to let.

With most lenders a minimum income is required even though they base the mortgage on the rental income. Lending rules changed in 2017 and in many cases your level of earned income also influences the buy to let rental calculation. The rules change if you are a basic or higher rate tax payer. Since the rules have changed, a few lenders have removed the minimum income, but you must have and be able to provide some level of earned income so normal payslips are still needed.

Property value £95,000
Loan amount £71,250
Loan to Value 75%
Rate 2.89% Fixed for 2 years
Monthly mortgage payment£171 on an interest only basis
Arrangement feeNil
Valuation fee £315

* You should seek advice from an accountant before you look to make an income from a property. You will have tax liabilities on this.

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