If you intend to invest in property then it is very likely that you will need a Buy To Let Mortgage. This kind of mortgage is different from a regular residential mortgage since the criteria for lending is based upon the rental income that the property can achieve rather than the buyers income assesment. Most banks and building societies can offer Buy To Let Mortgages, however, there are many specialist mortgage lenders which specialise in this kind of product and can offer some very attractive deals. Most high street banks will only look at offering up to 80% of the value of the property whilst specialist lenders may off 90% or even 100% in the case of gifted mortgages.
Buying Property
Buying property to let has become increasingly popular to the UK investor. Buy To Let mortgage lenders differ in approach. Buy-to-let borrowers do have to jump through some extra hoops to satisfy mortgage lenders. The buy to let mortgage term can be anything between 5 and and 45 years. If you are considering buy to let property as an investment then it is important that you have a good understanding of the current market.
Buy To Let Property
The more you are willing to do a property up, the higher the potential profits. There is the danger that the property could lie empty for long periods and the market could suffer a downturn. The advantage of a property close by is being able to keep an eye on it, but if you will be employing an agent anyway they should do that for you. One rule of thumb many buy-to-let investors apply is to factor in the property sitting empty for two months of the year this gives a substantial buffer. Finding the right property is key to the success of your long-term strategy.
Buy To Let Mortgages
Popular perception is that buy-to-let mortgages are hugely expensive and very restrictive. However, the interest rates available for buy to let products is really not that much higher than a regular residential mortgage. Landlords also have a choice between interest only and repayment mortgages. To begin with, buy to let mortgage lenders do not use the applicants income solely as a basis of approval, instead they base their decision mostly upon the likely rental income that the property will achieve. Over the long term, though, both the capital value of the property and the rental income should go up, making buy-to-let a balanced investment. Usually, regular buy to let lenders will demand the rent to cover at least 125% of the monthly mortgage payments. However some specialist lenders are more relaxed and may only require 100% full coverage.
Buy to Let mortgages are not regulated by the Financial Services Authority. Even though buy to let property is a fairly safe investment taking into consideration the historical movement of house prices, you still need to check the market very carefully before going ahead with a purchase.
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James Grantworth is the Marketing Director for Let Mortgages Limited providing
Buy To Let Mortgages with the minimum of capital investment - ideal for investors. For full details of our exclusive no money down Buy To Let Mortgage deals visit:
http://www.letmortgages.com
