Buy
To Let
mortgages
Buy to Let
Mortgages
are
mortgages
specifically
designed for
people who
want to
invest in
the property
market by
purchasing
one or more
houses and
letting them
out to
tenants. The
Owner is
then able to
benefit from
any
appreciation
in the
capital
value of the
house
itself. They
are also
likely to be
able to
maintain the
property and
meet much of
the loan
repayment
from the
revenue
realised by
letting. The
buy to let
phenomenon
has driven
house prices
higher over
the last few
years while
making a
broader
section of
rental
accommodation
available.
Buy to Let
Mortgages
differ from
what came
before by
specifically
allowing the
rental
revenue to
be
considered
as income
when
considering
the ability
of the buyer
to meet the
ongoing
mortgage
payments.
Buy to Let
mortgages
are very
similar to
standard
mortgages
for property
which the
owner will
inhabit. The
percentage
which the
buy to let
lender is
willing to
lend is
likely to be
restricted
to 80% of
the value of
a property.
The term of
a buy-to-let
mortgage is
likely to be
somewhere in
the region
of 5 to 45
years.
Interest
rates are
also likely
to be
slightly
higher than
those which
a standard
mortgage
agreement
attracts.
When buying
to let it is
important to
know the
market in
which you
will be
trying to
let your
property. It
may be worth
getting help
from a
letting
agent who
knows the
area, what
is in
demand, what
the likely
pitfalls
will be. By
planning
carefully
and
purchasing
wisely you
ought to get
a property
which
requires
little
maintenance
and is
attractive
to tenants.
Avoiding
void
periods,
i.e. time
between
tenants
where you
receive no
rental
income, will
be your
primary
concern once
you have
purchased
the house on
a buy to let
basis. While
not
inescapable,
you are wise
to do
everything
you can in
advance to
minimise the
likely
length of
these
periods.
Insurance is
now
available to
cover buy to
let
contingencies,
your
provider
ought to be
able to
provide you
with
information.
Many high
street banks
and building
societies
now offer a
buy to let
mortgage
product.
Independent
mortgage
broker will
also be able
to recommend
mortgage
arrangements
which are
not
available on
the high
street and
which will
more
perfectly
meet your
buy-to-let
mortgage
requirements.
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