Buy-To-Let Mortgage With No Income

A buy-to-let property can be a great investment or income source for both first-time and ‘experienced’ property owners.

But getting the right mortgage for it will depend on your financial status. And this makes a lot of people ask, ‘if it is possible to get a buy-to-let mortgage with no income?’

So, if you, too, are in the same boat, then this guide is just for you. Read on for all the important details!

Is It Possible To Get A Buy-To-Let Mortgage Without A Minimum Income?

As some of our readers may already know, getting a buy-to-let mortgage typically requires meeting a few basic financial criteria, like a minimum yearly income of around £25,000 with a lot of lenders.

However, as impossible as it may sound, buy-to-let landlords can secure a buy-to-let mortgage with no minimum income.

This means that you don’t necessarily have to be employed or self-employed and some lenders may be able to just use the rental income you will receive from the property in order to prove affordability.’

Lenders will take a holistic look at your circumstances and then look at applicants capability of covering rental voids.

Lenders can also consider other sources of income rather than just that from employment/self employment alongside using the rental income as a means to repay the mortgage.

Consequently, lenders offering this type of mortgage may ask you to draw a plan of repayment, but you don’t have to earn a fixed amount of money every month.

What Are The Different Types Of Allowances One Can Use To Get A Buy-To-Let Mortgage with No Income?

You may qualify for a buy-to-let mortgage if you’re living off one or more of the following allowances:

• Pension
• Rental income
• Government benefits
• Savings
• Bridging loan

It’s important to remember that not all no-income buy-to-let mortgage lenders will accept all the allowances mentioned above.

Hence, you should do your research to ensure that you go to the right lender according to your financial situation.

How To Prove Repayment Ability In This Case?

When it comes to applying for a mortgage, you will have to provide proof of income for repayment.

And as you may have already understood, it’s much easier for salaried or employed people to provide proof of income through pay slips or tax returns.

Likewise, if you have any government allowance or existing funds/savings these can be shown via bank statements and letters proving the income. 

On that note, let’s explore the overall process of providing your proof of income if you have:

1. Pension

Potential lenders over 55 years of age can withdraw cash from their pension account without any tax liability for up to 25% of the total amount in the account at that point.

But this isn’t recommended for pensioners less than 55 years, as the tax implications can be extremely financially draining.

Alternatively, if you have a SIPP (self-invested pension plan), you may be able to use all of its funds for mortgage repayment and purchasing investment properties.

2. Benefit Income

In case of government allowances like benefit income (such as disability premiums or tax benefits), most lenders look for a long-term benefit rather than something short-term (like child tax credits). 

3. Bridging Loan

A bridging loan is a short-term loan typically used by renters or homeowners to renovate a property before renting or selling it. If you are able to provide a suitable exit strategy (way of clearing the loan) this could be an option to explore.

4. Savings Or Existing Funds

Planning to repay the mortgage with a gift or existing fund or saving will almost always require you to disclose where the money has come from. Hence, it’s in your best interest to consult a financial adviser to help document relevant proof.

If investment properties (or rental income) are the major or only source of your income, and consequently, the mortgage repayment, you will have a few different options (as listed below).

And these will depend on the number of investment properties you own.

1. Less Than 4 Properties

In this case, you should be capable of providing all property accounts or self-assessment tax returns to disclose how much money you can bring in for mortgage repayment.

2. More Than 4 Properties

Owning more than 4 properties will generally put you in the ‘portfolio landlords’ category. And you will find lenders who put a limit on the minimum or maximum number of properties you can own to qualify for a new mortgage.

However, none of the properties you own outright will be considered in this case.

How To Get Buy To Let Mortgage If You Have No Income At All

If you don’t have any of the means of repayment we’ve mentioned so far, here are a few things you can try to get a buy-to-let mortgage with no income:

1. Use Your Assets

If you have any valuable asset (like monetary investment), lenders may consider it as collateral to assess and approve your application.

2. Enter A Joint Venture Or Partnership

You can also enter a joint venture or partnership with an individual who has a stable source of income and a better credit score for mortgage repayment. In hindsight, you will be combining resources to increase your chances of getting a mortgage.

3. Seek Family Assistance

If you have family members willing to support your mortgage repayments, they can sign up as guarantors or ‘additional security’ for your mortgage. As such, their credit score, income, and repayment ability will be considered for your mortgage approval.

4. Prepare A Strong Case

Lastly, you can prepare a strong case to show how investing in a rental property will make you money (and, of course, profits) so that you can repay the mortgage.

Besides, you may be asked to submit the following details (depending on the lender and irrespective of your financial status):

• Credit score and history
• Personal details
• Details of the property you plan to purchase
• Repayment plan
• Any assets that may help you secure funds for repayment

**A buy to let mortgage will be secured against your property.

Some types of buy to let mortgages are not regulated by the Financial Conduct Authority.

All content is written by qualified mortgage advisors to provide current, reliable and accurate mortgage information. The information on this website is not specific for each individual reader and therefore does not constitute financial advice.