Buy to Let Mortgages
Overview of Buy to Let Mortgages
Buy to let mortgages have been on offer in the UK since the late 1990's. Buy to let mortgages are exactly what they sound like, they are mortgages which allow buyers to purchase a property which they can then let out (rent) to tenants.
Private property rental has seen a massive increase in the last 5+ years and is now a very popular investment vehicle in the UK.
Getting a Buy to Let Mortgage
The amount of money you can borrow is largely determined by the anticipated rental value of the property. The rental income usually has to cover a certain percentage of the mortgage repayments, this is to allow some surplus rent to cover other costs such as property maintenance and long periods of time when the property is empty and therefore no rental income is taken.
Most lenders will require a minimum deposit to be placed down when taking out a Buy to let mortgage, probably around 10%-15%.
Sometimes lenders will offer Buy to Let Mortgages based on your salary. For more information on buy to let mortgage schemes and interest rates contact your local Bank or Building society.
Be prepared to share details of your personal finances, including bank statements, wages slips and so on when talking to lenders.
Buy to Let Interest Rates
Typically the interest rates that are offered on Buy to let mortgages are just very slightly higher than those offered on residential mortgages and may have slightly higher fees attached to it.
The higher interest rate is largely down to the perception that mortgages on property rented out carry a much higher risk than mortgages on standard residential properties.
Final Word
Buy to let has become quite fashionable in the UK, with the explosion of programs on the TV dishing out advice and tips on making the most of your Buy to Let.
Although some of these programs offers practical advice, don't get sucked into becoming a landlord unless you are prepared. Being a landlord can be very rewarding, but its is a lot of hard work and with all good investments its not without its risks.
delicious
digg
blinklist
furl
stumbleupon