A Laymans Guide to Buy to Let Mortgages
The Buy to Let property market seems to more popular than ever.
In fact, Buy to Let has been steadily increasing in popularity
since the mid-nineties and experts reveal that the market shows
no real sign of slowing down. Buy to Let seems to be the ideal
property investment; simply purchase a property and then let the
tenants cover the mortgage. However, there a number of things to
be taken into consideration when buying a second property which
you are not planning to live in and one the most important one
is buy to let mortgages.
Buy to Let Mortgages Basics
Buy to Let investment involves buying a property with the
intention of making a profit through letting. There is an
increasing amount of choice in the Buy to Let mortgage market
and this is mainly due to the increase in Buy to Let investing.
The conditions for Buy to Let mortgages differ from standard
mortgages as the intended purpose for buying the property are
different.
Some of the following differences should be considered before
going ahead with a Buy to Let mortgage and worth speaking to a
specialist buy to let mortgage about:
*Higher Interest Rates - Buy to Let mortgages usually have
higher than normal interest rates. *Rent - The lender considers
your income per annum, together with the amount of rent which
will be charged when letting out the property. *Deposit -
Lenders may require a higher deposit than the average standard
mortgage deposit - this may be as high as 25% of the property
value.
Buy to Let Intentions
Another point to consider when looking at Buy to Let Mortgages
is what the main reason for buying the property is. This may
sound a little strange as you are obviously buying the property
to let it but people have different goals involved with their
Buy to Let property. Have a look at two differing goals of Buy
to Let investors:
*Make a profit from the investment in the property itself and
re-sell it when house prices are high *Aim for a month by month
profit from the rent you charge
Buy to Let Costs
Regardless of the reasons you might have for buying a property
you will also need to consider all the extra costs you may
incur, some to consider are: *Tax issues *Letting Agency Fees
*Property Maintenance *Insurance (building insurance, contents
insurance, home insurance, legal insurance) *Furnishing Expenses
Before making any buy to let property purchases you should
always discuss your investment requirements in detail with a Buy
to Let mortgage broker. They can help maximise the potential
profit from your property investments and normally their advice
is free.