How to Get Multiple Mortgages for Investment Properties
Landlords with property portfolio ambitions often need more than one mortgage to make this possible. So, assuming your landlord registration and licensing requirements are in place, here’s how to secure buy-to-let mortgages for multiple properties in five easy steps…
1. Decide whether you actually need more than one mortgage
Once you’ve identified the properties you’re hoping to invest in, you’ll need to decide whether putting a buy-to-let mortgage on each of them is a better alternative to a single mortgage for the whole lot. Portfolio mortgages are sometimes available for landlords with a collection of properties, allowing them to take out a single loan for multiple premises.
You’ll need to have at least four investment properties to qualify for a portfolio mortgage, so if you’ve got three or less, you’d need to look at other types of finance.
One of the main benefits of having a portfolio mortgage is the fact you only need to make a single monthly payment for all of your properties and they appear on one statement. This means less hassle and admin legwork, but the key question you need to ask is whether it’s more cost-effective to have a portfolio mortgage versus multiple separate mortgages.
2. Find the right mortgage lender
This is vital as you don’t want to fall afoul of the cap some lenders have on the number of buy-to-let mortgages they’re willing to offer to one borrower. Some will only let you take out one or two, while others might agree to a higher number or even no limit at all.
Moreover, if a portfolio mortgage is the right option for you, you’ll need to find a buy-to-let mortgage lender who is best placed to offer you one. Not all mortgage providers are willing to consider them and the interest rates on offer can vary across the board.
A mortgage broker who specialises in buy-to-let mortgages will be able to help you find a lender whose limits on this won’t impact your portfolio plans.
3. Prove the rental potential
To qualify for multiple buy-to-let mortgages you will need to have enough deposit for each mortgage and be able to evidence affordability with rental forecasts for the properties you’re hoping to buy. Some lenders will need the overall rental forecast to amount to at least 125% of the total mortgage payments, while others might request up to 150%.
To get an official rental projection for your properties, you will need to find a letting agent that is approved by the Association of Residential Letting Agents (ARLA).
4. Get your documents and credit reports ready
Before you approach any lenders, it’s a good idea to have all of the paperwork you’ll need to hand as this could help you save time on your application. In addition to rental projection documentation, you’ll need other documents including proof of deposit, a mortgage statement for your residential home, and evidence of your personal income.
Downloading your credit reports will give you the chance to optimise them ahead of the application. Be sure to challenge any inaccuracies and request that any out-dated information is removed. Small changes like this could help you secure a better interest rate.
Once you’ve chosen your properties, evidenced their rental potential and got your documents together, it’s time to apply for the finance you need. Some landlords apply for agreements in principle before making a full application to see whether they’re likely to be approved for the mortgages they need and what terms the lender will offer.
A mortgage broker who specialises in buy-to-let can help you choose the right finance for your portfolio and guide you through the application process.