|
 |
|
|
Buy to Let Mortgages
Buying property to rent out privately is hugely popular in the
UK.
Buy to let mortgages can make sound investments, but do your
homework before you begin by finding out what buy to let mortgage
types are available to you and what types of investors to look
for.
Why Buy to Let Mortgages are Popular
Buy to Let mortgages are very popular in the UK. Reasons for
their growing popularity are:
|
|
 |
Property can be a great longer-term
investment, especially as stock markets can
be so volatile. |
|
|
|
Interest rates are low, so buy to let
mortgages offer an attractive alternative
investment. |
|
|
|
With the overall UK population rising, a
high divorce rate plus growing student numbers,
there is plenty of demand for rental
accommodation. |
|
|
|
Mortgage lenders are offering competitive,
specifically-designed, accessible buy to let
mortgages to make life easy for the landlord. |
|
|
|
 Buy to Let Mortgage Types
In the past, the only type of buy to let mortgages available
were variable rate deals. However, nowadays there is a whole range
of buy to let mortgages, from fixed rates and discounts to
trackers and flexible rate mortgages.
Buy to let mortgage lenders will usually insist that you
have a deposit of 15 per cent, so the size of your deposit will
help determine the amount you can borrow. Lenders will usually
insist that the rent the property will command covers 125 per cent
of your mortgage payments (although some will accept 100%).
This protects both you and the lender against rental
voids - periods when the property is untenanted.
Unlike residential borrowers, most buy to let investors opt
for interest-only mortgages, simply paying off the interest owed
to the lender, but not the outstanding capital. This is repaid on
the sale of the property.
Buy to Let Investors
There are two types of buy to let investor in the UK: the
professional landlord and the so-called amateur landlord. A
'professional' investor may have a portfolio of anything from
three to hundreds of properties, while the 'amateur' is more
likely to have just one or two.
Whichever type of buy to let investor you are, the basic
principles remain the same: you must buy the right property at the
outset, and get the right finance for it. And you must be aware of
the same things: your legal responsibilities as a landlord, and
how your investment affects your tax position.
There are plenty of lenders in the market to cater for your
needs.
Buy to Let Mortgages: Taxes and Legal Requirements
Tax issues can be complex with buy to let mortgages, so speak
to your accountant to determine your position on buy to let taxes.
In general Buy to Let mortgages are not regulated by the
Financial Services Authority. |
You can pay for our services by fee only. In these circumstances,
a typical fee is 1% of the loan payable on application . We would
then pay to you the fee we receive from the lender. Alternatively,
you can choose to pay no fee and we will retain the fee received
from the lender. With this option a typical fee would be 0% of the loan.
The precise amount will depend on your circumstances.
For more information or to discuss your particular
requirement, click here to contact us.
Your home may be repossessed if you do not keep up repayments on your
mortgage |
Bobby Marno trading as Black Pearl Finance is an
Appointed Representative of First Complete Ltd
which is authorised and regulated
by the Financial Services Authority. |
|
