Buy to Let Mortgage Guide
Over the last few years, private individuals have been offered
buy-to-let mortgage schemes as an alternative form of investment. A
buy-to-let mortgage is a loan for an individual to purchase a
property for the explicit purpose of renting it out. Many people see
buy-to-let schemes as an alternative to a pension.
Obviously, there are pros and cons associated with any business
or property venture, so it is best to plan carefully and to speak
with a professional advisor before taking the plunge. Some factors
to think about before making your decision:
Type of property
Analyse the market you are buying into and make a decision on
what properties are attracting the largest rents and which
properties are least vacant. You need to find a property that suits
the local rental market. Also make sure that the property will be
low-maintenance and will not require a lot of repair workType of
property
Availability of Finance
Before committing to purchase a property, you will need to
determine if you sufficient finance available either out of your own
savings or with the help of a mortgage lender. It might prove
helpful to speak with several banks or a mortgage broker about the
types of finance available to a person in your specific situation.
It is important to remember that the lending criteria for
buy-to-let mortgages are often more restrictive than residential
mortgages. While it is possible to secure a residential mortgage for
up to 100% of the purchase price of your home, buy-to-let mortgages
are rarely available for greater than 85% of the purchase price.
In all your financial planning, remember that your property will
be at risk if you do not keep up on payments on any mortgage secured
on it.
Overview
of buy to let mortgages |
