
What is an Agreement In Principle (AIP)
Agreement in Principle (AIP) The way it works is as follows: An Agreement in Principle is a security blanket for you, based on
Bluebell Mortgages are expert mortgage brokers and have a detailed knowledge of mortgage lenders’ and first time buyer mortgages.
We can inform you of all the likely fees associated with a house move, identify your current position and calculate your likely required loan amount.
If you already have a mortgage and your current deal is due to expire in the next 6 months, we can help find you the most effective deal for you.
We have a vast experience of the Buy To Let market and are able to offer our clients detailed advice on the correct method of funding potential purchases.
An effective way for first time buyers to get on the property ladder, it can considerably reduce the amount needed for a deposit.
Bluebell Mortgages have specialist advisors who can assist you with your first or next commercial or self-build development.
The days of retiring at 65 are disappearing fast, people are living longer and borrowers are getting older.
This can range from Life Assurance to protect your mortgage or family, Critical Illness cover, Income Protection and General Insurance.
We’ve collated our most frequently asked questions below, but if there’s a question on your mind that we haven’t covered, please get in touch.
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Many clients are looking at ways of supplementing their income and Buy to Let investment properties can be an effective way to achieve this. **
Bluebell Mortgages has a vast experience of the Buy to Let market and are able to offer our clients detailed advice on the correct method of funding potential purchases.
Most Buy to Let mortgages are offered on an interest-only basis. This means that when you make a payment you are only paying the interest on the loan but none of the capital.
Whilst this may be good for short term cash flow, you will need to ensure that you have a plan in place to either pay off the full loan or refinance at the end of your mortgage term.
you’ll generally need a deposit of at least 25% of the value of the home.
As with normal residential mortgages, the larger the deposit you have, the better the deal you’ll be able to get. Some competitive Buy to Let rates can be available on mortgages with deposits of 40% and above.
is whether to own your property within a limited company and arrange a limited company Buy to Let mortgage. Or whether to arrange a personal buy to let mortgage and purchase the property in your sole name.
Both have advantages and disadvantages in terms of tax treatment and making the wrong choice can cost you thousands of pounds.
There have been lots of changes in the Buy to Let market in recent years with new tax rules coming into force surrounding the deduction of mortgage interest and the increased rates of stamp duty for those buying second and subsequent properties. Nevertheless, the Buy to Let sector continues to show strong growth and returns. (Octane Capital | Buy-to-let sector value up £239bn since 2017)
These tax changes, coupled with rule changes for lenders surrounding portfolio landlords, (defined as those with 4 or more mortgaged Buy to Let properties) have created tougher criteria for borrowers on rental coverage and affordability. This has in some circumstances made it harder to obtain a buy to let mortgage.
**Bluebell Mortgages does not provide tax advice, independent tax advice should be sought on investment
way that they are assessed.
As part of their affordability assessments, lenders use ratios to calculate how much profit a landlord is likely to make.
Lenders will use the rental income generated from renting the property to calculate out how much they will lend you.
If the ratio is sufficient then you will be eligible to apply for that loan size.
There are also other parameters we must hit in order for the buy to let loan to be granted, such as deposit size and personal income.
are subject to different assessments.
And may need to submit additional information such as Cash flow projections and business plans for their portfolio refinancing.
We see many scenarios where Buy to Let rental income doesn’t hit the lenders requirements, this is generally in areas with high property prices such as London. If the rental income doesn’t meet the lenders requirements, we have the ability to use “topslicing” which can generate a larger loan than basing the assessment on rental income only.
“Topslicing” of Buy to Let rental income works by enabling you to use any surplus personal income you have to meet the lenders rental criteria. The lender will assess your personal income and other commitments such as your personal residential mortgage and loans, credit cards etc to work out whether you have a surplus. Each lender that uses topslicing has their own criteria to calculate what your notional surplus income is. If they deem you have enough surplus income to cover any shortfall on your Buy to Let mortgage then you can obtain a larger loan than you would on rental income alone.
Topslicing is a great tool to use for some clients & portfolio landlords, but it can be very complicated.
Please contact us if you are having problems with low rental income restricting what you can borrow on a Buy to Let mortgage.
**Bluebell Mortgages does not provide tax advice, independent tax advice should be sought on investments
There have been some changes in the Buy to Let market recently with tax changes coming into force surrounding the deduction of mortgage interest and the increased rate of stamp duty on second properties.
These changes, coupled with new rules surrounding professional landlords, (defined as those with 4 or more mortgaged Buy To Let properties) have created tougher criteria for borrowers on rental coverage and affordability. This will make it harder to obtain buy to let finance.
It is therefore essential that you receive the correct advice before making any decisions.
Bluebell can advise on various ways of structuring your property purchase or refinance that may make it more tax efficient.
We can also refer you to a third-party associated chartered tax accountant if more detailed advice is required.
If you already have a Buy To Let property or portfolio, Bluebell can advise on remortgage options to lower your interest payments or raise capital for your further investment plans.
Your home may be repossessed if you do not keep up repayments on your mortgage.
*The Financial Conduct Authority does not regulate some forms of Buy to Lets.
**Bluebell Mortgages does not provide tax advice, independent tax advice should be sought on investments
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5a Delta Terrace, West Road, Ipswich, Suffolk, IP3 9FH
Bluebell Mortgages Ltd, trading as Bluebell Mortgages is an appointed representative of H L Partnership Limited which is authorised and regulated by the Financial Conduct Authority. Bluebell Mortgages Ltd is a company registered in England and Wales with company number 09397210. The registered office address is 5a Delta Terrace, West Road, Ipswich, Suffolk, IP3 9FH. The information contained within this website is subject to the UK regulatory regime and is therefore targeted at consumers based in the UK. A fee may be payable for mortgage advice, which will depend on your circumstances.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
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