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Buy to let mortgages for first time buyers

Obtaining a buy to let mortgage as a first time buyer can be tricky. However, that doesn’t mean it’s not possible. The problem is that buy to let mortgages usually contain a more simplified underwriting process when compared to a traditional mortgage. This creates a potential risk for lenders that could easily be exploited. As a result, many lenders won’t allow first time buyers to apply for buy to let mortgages.

What’s the problem?

When applying for a buy to let mortgage, most lenders are effectively only interested in the amount of deposit you have available and the anticipated rent. Whereas when applying for a mortgage on your main residence, lenders will be looking at your deposit, your income, your outgoings, and many other factors. The risk to lenders is that first time buyers who have a large deposit but low earnings will apply for a buy to let mortgage, but rather than renting it out will instead live there themselves. So it effectively becomes a ‘backdoor’ residential mortgage.

What’s the solution?

As mentioned, all is not lost. Some lenders will allow first time buyers to obtain buy to let mortgages. To overcome the lender’s concerns, what they do is effectively underwrite the case twice. Basically they will assess the application to make sure it passes their buy to let criteria, but they will also assess the application as if it was a mortgage for your main residence and you were planning to live there. Provided you pass both criteria, all is fine.

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Check you’re eligible for a mortgage

Before you even start thinking about how much you can borrow, or what type of property to buy, the first important step is to make sure you’re likely to be eligible for a mortgage. To help you with this, we’ve created a short quiz that will indicate whether or not you’re likely to be accepted.