A buy-to-let mortgage (also known as an investment mortgage) is designed for borrowers who want to let their property out to a third party (i.e. tenants).
More and more people are investing in property as a long-term opportunity to make profitable returns, and as a way of securing finance for their retirement.
There are many potential benefits to investing in property and the financial returns can be twofold: there is the potential for capital growth if the value of the property appreciates and the property may also yield a regular rental income.
Cost of Buy-To-Let Mortgages
Buy-to-let mortgages are usually more expensive than residential mortgages, as lenders often consider them to have a higher associated risk. However, any difference can usually be balanced by rental yield. Although some lenders will limit the number and /or total value of buy-to-let mortgages available to an individual, others may provide services to help private investors expand their property portfolio.
Today there are plenty of competitive buy-to-let mortgage deals available that are specifically aimed at the buy-to-let market, ranging from special offer buy-to-let mortgage deals to fixed and variable rate options.
In addition, mortgage lenders will often assess buy-to-let mortgages on the earning potential of the property (i.e. the rental income) as well as normal income.
When you take out a buy-to-let mortgage, you will be expected to meet certain criteria and you will be required to put down a deposit which will be typically larger than for a standard residential mortgage, usually 15-25% of the property’s value.
Your expected rental income must exceed your buy-to-let mortgage repayments by a certain percentage – for example, your mortgage lender may require a rental income of 130% of your monthly mortgage payments.
Your buy to let mortgage lender will also want to establish whether the property you are buying is a good long-term investment.
At Carter Lee we have proven track record in sourcing buy-to-let mortgages for individuals looking to invest in the property market for the first time as well as for established investors who already have a property portfolio.
As we have access to a wide range of lenders who support buy-to-let mortgages, you can be sure that you’re getting the right guidance for you or your businesses. We will provide advice and guidance throughout the whole process making your buy-to-let investment work for you from the word go.
For more information about buy-to-let mortgages, call Carter Lee on 01792 416260 or email us with your specific enquiry at email@example.com.
Your home may be repossessed if you do not keep up repayments on your mortgage.