Guidelines For Buy To Let Mortgages UK

2007-03-08 10:33:40

( Financial )



Buy to let mortgages UK are mortgages used for the purchase of a commercial or residential property on the assumption that once purchased, the said property will generate income through letting.

There are certain considerations that a mortgage lender takes into account before you are granted your buy to let mortgage. They check at your credit worthiness, the market value of properties in the area of investment, the property taxes and typical letting value in the area of your interest, your source of income and the amount of initial payment you can afford.

There are different methods for which a lender calculates the amount of buy to let mortgages UK. Some take a look at your wages against the amount of estimated lease amount in the market, while others will consider the mortgage amount based on just the income from letting. The formula they use in calculating your mortgage amount is usually multiplied by 125% times the lease amount. Others will multiply your salary three times and add half the estimated income from letting. You should do your sums and decide which option is feasible for you.

To ensure you get the best buy to let mortgages, you should approach a buy to let broker instead of a typical broker, as not all mortgage brokers would be willing to take a risk and offer you a mortgage on this instance. Buy to let mortgage brokers will be able to refer you to a number of mortgage lenders who are likely to grant the mortgage loan.

There are a number of points to consider when thinking of taking out buy to let mortgages UK:

Most lenders will request you to make a deposit based on a certain percentage of the amount of your loan.

You can obtain a slightly better interest rate if you have equity in your home. You can also take the equity from your home and use this to pay part of your deposit.

These mortgages can be paid within 1 to 45 years, and interest charged from buy to let mortgages UK are tax deductible.

There are numerous costs that are involved with investing in a property. Aside from the deposit that you need to pay out to your lender, you also need to pay for the cost of decorating your property, purchasing furniture and appliances, paying for solicitors’ fees, valuation costs, stamp duties and surveys. In addition, you may also wish to hire a real estate broker who can take over the cumbersome job of locating a tenant for you, and managing your property for you.

Finally, among the most important things you should keep in mind is that if your property is found to be without a tenant for a certain period of time, you as the landlord will be liable to pay for the mortgage payment for the period that your property is not leased out.


All rights Reserved © Tradenet Services srl
Do not duplicate or redistribute in any form.