If you're looking for a mortgage to buy a property to let out to rent paying tenants, and that neither you nor your relatives will live in, the following FAQs my help you.
- How many Giraffe Buy to Let properties can I have?
- Is there an age restriction?
- Can I Buy to Let if I'm a first time buyer?
- How much will Giraffe lend me?
- How much rental income must the property generate?
- How much deposit will I need to put down?
- What are the min and max size mortgage loans you will arrange?
- Are there restrictions on the type of tenants I can rent a property to?
- What if I can't secure tenants at any time?
- What if I want to cease being a landlord?
- What fees should I expect to pay?
- Can I add the arrangement fee to my mortgage?
- Are legal fees included free?
- Can I make overpayments without being charged?
- Can I move a Giraffe Buy to Let mortgage to another property?
- Are there any parts of the UK where you don't lend?
How many Giraffe Buy to Let properties can I have?
We can give you mortgages for up to 5 Buy to Let properties on top of the mortgage on your own home, so you can build a portfolio of properties with us.
Is there an age restriction?
Yes. You must be 21 or over to take out a Giraffe Buy to Let mortgage.
Can I Buy to Let if I'm a first time buyer?
Not if you're buying alone. However, if you're buying jointly, you can. But the other applicant must be a second time buyer.
How much will Giraffe lend me?
There's no easy answer to this as, unlike an ordinary residential mortgage, the amount you can borrow with a Giraffe Buy to Let is based upon the expected rental income rather than your personal income.
How much rental income must the property generate?
The rental income must be on an unfurnished basis and be equal to, or greater than:
- 100% of your monthly repayments (if your mortgage is fixed or capped for 3 years or more)
OR
- 118% of your monthly repayments (for all other mortgages)
How much deposit will I need to put down?
With a Giraffe Buy to Let mortgage we will lend you up to 90% of the purchase price (or valuation price if it's lower). So you will need at least 10% of the purchase price as a deposit.
What are the minimum and maximum size mortgage loans you will arrange?
On property purchases, the least we will usually lend is £15,001. In the case of remortgaging, this minimum figure is £25,001. In both instances, the maximum borrowing limit is normally £500,000.
Are there restrictions on the type of tenants I can rent a property to?
Some. They must be standard residential tenants (holiday lets, multiple occupation tenancies or your relatives are not permitted). Student lets (up to 4 tenants) are acceptable, as are Department for Work and Pensions (DWP) tenants. There must be an Assured Shorthold Tenancy in place (or Shorthold Assured Tenancy in Scotland). This is an agreement which gives a landlord the right to have the property back at the end of the tenancy term.
What if I can't secure tenants at any time?
Regardless of whether you have tenants in the property or not, you must keep up your mortgage repayments. If you want the ability to take payment holidays to help in this situation, consider our Flexible Buy to Let mortgage option.Otherwise, ensure you can pay the mortgage out of other income during times when you're not receiving rent.
What if I want to cease being a landlord?
It's up to you. You can sell the property with the tenants still in residence as a going concern, or wait until their tenancy agreement has expired and sell it with vacant possession.
What fees should I expect to pay?
To cover our reasonable administrative costs we have to charge certain fees. These vary from product to product but may include some or all of the following. Please see individual product pages for specific details.
- Arrangement fee - Payable on most of our mortgages for setting it up. Paid on completion or can be added to the mortgage itself.
- Non refundable booking fee - Only charged on some mortgages and paid before you apply.
- Early repayment charge - If you repay all or part of your loan before the end of early repayment charge period, we may charge you a penalty to cover any losses we might otherwise incur.
- Lending fee - We charge a lending fee of £195 for making a loan under a new mortgage. The fee is due on completion but you can defer payment until the mortgage is fully repaid. We will not charge interest on the fee in the meantime.
- Mortgage release fee - When you repay the whole of the loan you must pay us any mortgage release fee that we charge at the time of full repayment. If you have deferred payment of the lending fee you must also pay this.
- Part repayment administration fee - Payable in certain circumstances if you repay part of your loan early as a lump sum or make annual overpayments greater than 10% of your mortgage.
- CHAPS fee - A £30 fee when we electronically send you your mortgage money via the Clearing House Automated Payment System.
Please note, we may vary our admin fees during the course of your mortgage to reflect our costs.
Can I add the arrangement fee to my mortgage?
Yes. But in doing so you will be charged interest on it at the same rate as your mortgage loan.
Are legal fees included free?
Only on some mortgages and only if you use them to remortgage with us. This offer applies only to standard remortgages where our nominated solicitors, Legal Marketing Services (LMS), do the legal work. LMS act for us only - if you need any legal advice/work done, please instruct your own solicitor.
Can I make overpayments without being charged?
Yes. You can pay up to 10% of the mortgage balance each year without incurring any early repayment or administration charges. Subject to a minimum payment of £2,000, based on the outstanding balance as at the previous 31st March each year.
Can I move a Giraffe Buy to Let mortgage to another property?
In some instances, yes. If you sell up and buy another Buy to Let property, we'll do our best to help you carry on enjoying the same rate on the amount outstanding from your original loan for the remainder of any promotional period. Please ask for details.
Are there any parts of the UK where you don't lend?
No. We lend in England, Scotland, Wales and Northern Ireland.