Buy-To-Let Mortgage
More and more popular is the investment
in Buy-to-let properties becoming. Indeed, there are more
than 300,000 properties in the UK with buy-to-let mortgages.
Whether the property is standing on the edge of a cliff
or in the centre of a town, you must do your homework
on the property to be sure that it is a sound investment.
Buying properties for the purpose of letting them out
can be a very lucrative business venture, with the rent
paying off the mortgage, leaving a little nest egg when
the mortgage is paid off.
There are many good reasons for investing in a Buy-to-let
property:
· With the overall UK population
rising, growing student numbers, plus a high divorce rate
there is plenty of demand for rental accommodation.
· Mortgage lenders offer competitive,
specifically designed buy-to-let packages to make life
easy for the landlord.
· Interest rates are currently low
so buy-to-let mortgages are very affordable.
· Property is an excellent long-term
investment, especially when compared with the stock markets
volatility.
Different Mortgage types:
Previously, there were only two types of
buy-to-let mortgages available, they were variable rate
and fixed rate deals. However, nowadays there are a whole
range of buy-to-let mortgages from fixed rate and discounts
to trackers and flexible.
Buy-to-let mortgage lenders will almost always insist
that you have a deposit of 20%. So the size of your deposit
will help determine the amount you can borrow. Lenders
will also insist that the rent the property will command
covers 130% of your mortgage payments. This protects both
yourself and the lender against rental voids – periods
when the property is unattended.
Unlike residential borrowers, most buy-to-let investors
opt for interest-only mortgages, simply paying off the
outstanding capital. This is repaid on sale of the property.
