subject: How To Obtain A Mortgage For Investment [print this page] The residential mortgage is no different from obtaining a mortgage for investment. Usually, in acquiring your first mortgage for investment, you can meet the same criteria from those when you purchased your home. Take note, however, that there are some distinctions between having a housing mortgage and a BTL (buy to let) mortgage.
When you are a novice to property investment, some lenders would like to be certain that you have gone through all the pieces of your mortgage for investment property. Before a novice should start his first mortgage for investment, one should have an ample knowledge first before embarking in any investment that invloves money.
Advice on BTL Mortgages
You can find a lot of resources out there if you need some advice on your first mortgage for investment. You just have to search for the right location where you plan to have your investment. You may visit the area and be knowledgeable with the facilities like restaurants, shopping areas, schools, and public transport. If the area is accessible to these amenities, this becomes an added benefit as this is one of the key features that a tenant may require in a property.
When you decide on to have a monthly income or increased capital growth from the property, it is important to get advices from professionals and experts. There are professionals and investment experts like letting agents who have knowledge on the pulse of the local market. They have knowledge on what kind of property you are looking for. Your plan on where to use the property is vital in looking for the right property for your mortgage for investment.
It is vital to know the criteria of mortgage lenders, when searching for a first investment. Some may be strict and may require landlords to have a job or steady source of income so that they can be sure of meeting the repayments on their mortgage for investment property. Some may even require new landlords to have a limit regarding the number of properties.
As a landlord, you will have legal responsibilities. You are obliged to guarantee safety on and around the property. This requires you to meet fire safety requirements on gas, electricity, furniture and furnishings.
You will also be in-charge of building insurance, repairs and maintenance, service charges (if leasehold flats) or ground rents. You have to prepare enough funds to cover these essential charges and/or expenses.
A rental cover is one primary concern in investment mortgage. This amount is derived when rent income has exceeded the interest payment on the mortgage. In most cases, this amount is about 125 to 135 per cent. There are some lenders who accept 100 percent rental cover, provided that the payment is in the form of increased load on the rate.
Finally, carefully consider if you can afford the property. It is important to note that the market value of the property may go up or down; hence you should be ready for this upon embarking on your investment.
by: Claud Pearce
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