Buy-to-let mortgages are for investors and homeowners who want to buy into the property market, purchasing houses specifically for the purpose of letting them out to tenants.
Not only is the owner able to benefit from capital value appreciation of the house, but also likely to be better able to maintain the property and realise much of his loan repayment from the income from letting. There are two contrasting sides to this buy-to-let phenomenon. It drives property prices higher, as it has over the last few years, while, on the other hand, it makes a broader range of rental accommodation available for tenants.
Buy-to-let Mortgages are different from the usual home and property mortgages, only so far as they specifically allow rental income to be considered income contributing to the ability of the buyer to meet mortgage payments. In almost all other aspects, buy-to-let mortgages are quite similar to standard mortgages those issued for property that the owner will live in. The percentage of the money that the buy-to-let lender is likely to be willing to lend is probably restricted to a similar 80% of property value, while term may be in the general range of a minimum of five, to a maximum of forty-five years. Another difference, though, is that interest rates are much more likely to be marginally higher than those charged for a similar standard mortgage agreement.
When you are considering buying to let, it is important for you to do some research about the market in which you are planning to try and let your property. It is possibly advisable to get some help from letting agents who may know the area you wish to purchase in. They should be able to advise you what the demand is currently for and what the likely problem areas are. Through careful planning and sagacious purchase, you are likely to acquire a property requiring minimum maintenance that would be attractive to prospective tenants.
Avoiding, or reducing void periods, the time between one tenant leaving and another moving in, when you receive no rent at all will likely be your primary concern after you have acquired the house with the help of a buy-to-let mortgage. Although these periods cannot be eliminated altogether, any landlord would be wise to do all in their power, beforehand, to try to minimise the length of any of these periods. These days, specific insurance is available that covers such contingencies. Speak to your insurance provider to gather all the information you can about such products.
A number of high street banks as well as various building societies are offering buy-to-let mortgages, while independent mortgage brokers can recommend mortgage arrangements not available in general but more perfect for your requirements.
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