Until recently, it has become increasing difficult for first time buyers to get a foothold on the property ladder in the UK. Due to the rapid increase in house prices over recent years, more and more first time buyers are finding it almost impossible to raise the deposit required for a regular residential mortgage.
Some first time buyers have resorted to purchasing a cheaper rental property abroad with a view to reselling the property at a later date and using the profits for a deposit on a UK property.
The introduction of the Builders Deposit Or Gifted Deposit Buy To Let Mortgage has created a much more attractive alternative.
A Builders Deposit Or Gifted Deposit Buy To Let Mortgage is a recent product aimed at investors who are looking to build their property portfiolios quickly and at the minimum of capital investment and is available to first time buyers
A 15% builders deposit or gifted deposit buy to let mortgage provides 100% finance for buy to let investment property purchases if the buyer negotiates a 15% discount of the market value of the property. The buyer does not need to invest any capital into the property as the 15% discount is in effect the deposit on the mortgage.
This product has opened the door to first time buyers who are unable to raise the deposit for a residential mortgage. If the first time buyer can negotiate a 15% discount off the actual market value of the property then there is no further need to invest borrowed money or personal savings into the property. They can subsequently let the property to cover the mortgage payments. There is an immediate 15% equity in the property. This will likely to increase over time as house prices inflate and the equity can be released at a later date to use as a deposit on a regular residential mortgage.
These mortgages are proving extreemely popular with investors as there is no need to tie up capital, which can be used in other investment opportunities. The rental assessment is based upon 100% of the monthly mortgage payment so qualification is very straightforward unlike many other mortgage products which sometimes demand a 125% or even 130% rental coverage.
If it does not qualifiy you can still get this kind of mortgage for the investment. All you need to do is check that you have sufficient salary and outgoings to make up the mortgage shortfall and you may proceed.
Whether you are a current landlord or an individual looking to buy your first buy to let property, it really does not matter, as you can now reduce the risk of investing without having to use your own funds as a deposit.
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James Grantworth is the Marketing Director for Let Mortgages Limited, a company specializing in
Buy To Let Mortgages that require no capital investment. For full details of our no money down Buy To Let Mortgage deals visit:
http://www.letmortgages.com
