No or low proof of income explained:
Over the last 12 months, the dynamics of the lending market have changed for the standard and specialist Buy to Let sector.
Several lenders have now broadened their requirements for lending by allowing applications for Buy to Let mortgages with no proof of income. They will also consider Buy to Let mortgages with no minimum income.
This is a particularly beneficial change for example, for professional landlords and other experienced property investors, who may have undertaken works on a property or used other tax mitigation strategies, to reduce their income.
It could also benefit professional landlords who cannot meet the minimum income levels of £25K to £40K in years 2 to 3.
Usually, this is for very good reasons such as, costs have been incurred improving the portfolio which resulted in a small loss, or the landlord has decided to take a repayment of a Director’s loan.
Lenders have acknowledged that Buy to Let affordability is based on rental income and not personal income; this makes it more accessible to landlords.
In cases where no proof of income is required, the credit and applicant are very credit worthy. It is great to see more choice entering the market.
Yes, you can. There are buy to let lenders who offer mortgages with no minimum income. It’s important to remember that buy to let mortgages are very different from residential mortgages, the proof of income is taken from the rental income.
Some lenders won’t ask for a minimum income but will still perform a sense check, to ensure the applicant’s personal commitments do not exceed the rental income.
BTL mortgages typically require a 25% deposit.
If you are employed, some lenders may ask for proof of income in the form of 3 months most recent payslips and others may not, so it varies between lenders. For more information, please contact us to speak to one of our experienced property finance advisers.
If you are self-employed, there are lenders who may not ask for proof of income in the form of an SA302, however, they may ask for the most recent 3 months bank statements instead.
This is why it’s important to speak to a mortgage broker, please contact us if you have any questions.
Our advisers offer a free consultation, so please give us a call or use the “Get in Touch With Us” form at the end of this page
Advantages of Proof of Income
Disadvantages of Proof of Income
Important Information
ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
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