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Buy to Let mortgages are specially designed for people who want to invest in property to let out and generate income.
When you buy property as an investment, you won’t be able to fund your purchase with a normal residential mortgage. Instead, you’ll need a specialist buy to let mortgage.
Many buy to let mortgages are provided on an interest only basis. So in the short term, your outgoings will be less each month, but you’ll need to pay off the full loan or refinance at the end of your mortgage term.
You’ll need a deposit of at least 25% of the value of the property. The bigger the deposit you put down, the better the rate you may be able to get.
The amount of rent you can charge depends on the type of property you choose, how you furnish it, who you are attracting as tenants and the market at that time.
Choosing the right buy to let mortgage
There are three types of buy to let mortgages:
Regulated buy to let
This type of mortgage is for a property that you or a member of your family will occupy either now or in the future.
Consumer buy to let
These are mortgages for people who let out a property, but did not plan to and have become ‘accidental landlords’.
It happens when the property has been inherited or when the owner, having previously lived in the property, is unable to sell it and chooses to let it out.
Business buy to let
This buy to let mortgage is suitable for when you purchase property purely as a commercial decision to generate income. If you wish to invest in a holiday home or property to take advantage of holiday rental rates, we also offer a Holiday Buy to Let mortgage
Top tips for successfully buying to let
Work out your budget
Know how much you’ll have to spend before you start looking for a buy to let property. Generally speaking, the minimum income requirement is usually £25,000 for a buy-to-let mortgage application. You’ll also need enough for a deposit so it makes sense to start saving.Do your research
Before you sort out the mortgage you’ll need to take some time to research the type of property you’re going to buy and the area it’s in. Are your ideal tenants young professionals or a family?Some buy-to-let investors look for properties near where they live, thinking that it will be easier to keep an eye on it. It’s often a good idea to consider places with excellent commuting links. University towns make perfect sense if you’re focusing on a student let.
Take a wider view
Consider properties that need improvement or renovation. This is an effective way of boosting the value of your investment.Go and see properties at different times of the day, and take pictures or even videos on your phone so you can refer back to what you saw later, to compare with other potentials.
If you’re interested in finding out more about Buy to Let mortgages our mortgage experts can help you. Simply call 01664 494100 or visit our Mortgage Advice Bureau website.
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