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| Guide to Buy to Let Mortgages
Guide Contents Owning a buy to let home is a massive investment and commitment! What are buy to let mortgages?A Buy to Let Mortgage is exactly that....a mortgage which allows you to buy a property and then rent it out to tenants for an agreed monthly/weekly amount. Generally, Lenders view buy to let mortgages as higher risk and this is reflected in the interest rates which are available. Buy to Let mortgages currently account for 11% of the mortgage market. More and more people are turning to buy to let property as a good way to invest their money and as it increases in popularity Lenders will be forced to offer more competitive rates. The way that Lenders calculate the amount that they are willing to lend is commonly based on the amount of rent expected from the proposed property. The monthly repayments need to be approximately 25%-50% less than the monthly rental income. Some Lenders will also take into account your gross annual salary. Having a property from which you receive rent, means that you will be receiving extra income, this effectively makes you a business owner and you then become subject to various tax implications, it would be wise to seek tax advice from a specialist advisor before making any commitments. |
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If I do not have any tenants in the property paying rent, will I be able to cover the mortgage repayments? Whether the property is rented out or not, you are responsible for making the repayments on your loan.