Buy to let mortgage insurance UK

Buy to let insurance: additional costs

Having found the right property, and decided on whether you're going to plump for an interest only or a repayment mortgage, you might reasonably expect to be able to put your feet up and relax. However, the number crunching has just begun. It's important not to confuse the figure that the bank or building society is prepared to lend you with how much you are able to spend on a property. Unfortunately there are a myriad of additional costs, which include the following:

Stamp Duty : for properties costing more than £60,000 stamp duty starts at 1%, then spirals upwards.

Mortgage Indemnity Guarantee : lenders require an additional insurance guarantee to be taken out if your deposit is less than 10% of the purchase price.

Legal costs : solicitors and a licensed conveyors don't come cheap, nor do their admin staff.

Survey and valuation : before offering a mortgage on a specific property lenders insist on a full survey and valuation.

Insurance : building insurance is a legal requirement when taking out any mortgage, but with a buy to let mortgage you may want to consider some additional cover: such as public liability or white goods policies (remember that insurance can be written off against tax).

Letting Agent : there's a long list of reasons why some landlords prefer agencies to manage their property, and surprisingly one of them is financial. Letting agents often save headaches with tenants and the cost can be deducted from your tax bill.

Furnishings : whether or not you decide to let your property furnished or unfurnished you'll still have to shell out for the minimum of white goods.

Upkeep : how much you spend on decorating and maintenance is between you and your tenants, but if you look after the property; the chances are that they will too.

Admittedly many of the above costs are difficult to calculate in advance, but as long as you set aside capital to budget for each expense; then you shouldn't come across any unexpected problems.

 

 

 

 

 

 

© AskFinancially.com 2008

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