subject: Buy To Let Mortgage [print this page] Buy To Let Mortgage Buy To Let Mortgage
Buying a property to let is a tried and tested form of investment that can also provide an income and is coming back strong. ( Even more Buy to Let Mortgages Available)
Although in recent years the market has restricted, there are plenty of indicators to suggest that buying to rent is still a viable ambition.
Property prices have fallen, which means that if a long-term view is taken then values should rise, leading to profit in the long term.
Due to first time buyers struggling to get on to the property ladder at present the number of people renting has increased meaning tenants should be relatively easy to find.
And if demand for places to rent is high, then charges can be raised accordingly.
Like the mortgage market as a whole, products are not as easy to come by as they were before the credit crunch, but they still remain available if you know where to look.
If you want to buy to let you must be up front with any lender about your plans for the property.
Lenders will take into account what the rental income is likely to be and will want it to cover 25 per cent more than the monthly interest payments on the loan.
The extra requirement is to cover times when the property might be vacant.
Buyers' incomes might be taken into account by lenders who tend to like a large deposit for buy-to-let deals.
If a deposit of 40 per cent or more can be put down, terms become a lot more favourable.
The rates used in calculations depend on the lender and will of course vary.
Max Erskine from remortgagenow.co said: "Some landlords got stung during the credit crunch, but the buy-to-let market is still viable.
"Lenders are more cautious than they were in the boom times, and buyers should be too.
"Buying to let remains an important part of the mortgage sector and with property prices having dipped in the last couple of years there are places available.
"Tenants are also in greater supply due to the slow down in the property market.
"My advice is to take advice. There are pitfalls ready for new landlords to fall into.
"Be prepared, spend wisely and you could snap up a real nest egg for the future."
