BUY TO LET MORTGAGES

Buying a property to rent out is an increasingly popular way of raising some money in the growing property market and can be a good long-term investment. If you have a strong credit record and earn over £25,000 a year, then you are more likely to be approved for a buy to let mortgage.

There are some other restrictions you may come across when requesting a buy to let mortgage, which you can read more about here. When we find out how much you are able to borrow from your mortgage, it is likely that the rental income you will be receiving will have an impact over this.

TYPES OF BUY TO LET MORTGAGE

Choosing whether to take out an interest only or a repayment mortgage can be a complicated decision to make if you do not have help from an expert. If you are a landlord or property investor, choosing the interest only route is potentially a better choice as you have the necessary cashflow to invest in multiple properties as a long-term investment.

For clients investing in property as a way of raising some pension funds or wanting to invest in just one or a few properties then the repayment method is a better choice.

 

A MORTGAGE IS A LOAN SECURED AGAINST YOUR PROPERTY. YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE OR ANY OTHER DEBT SECURED ON IT.

THE FINANCIAL CONDUCT AUTHORITY DOES NOT REGULATE MOST FORMS OF BUY TO LET MORTGAGE.

BUY TO LET RE-MORTGAGE

There are several re-mortgage options available to you if you already have invested in a buy to let re-mortgage and own more than 25% of the property. With access to a wide range of mortgage lenders across the UK, we can provide a cost-effective solution allowing you to raise extra money to use however you like, for example as a deposit for another property. It is important to keep in mind that the Financial Conduct Authority will not regulate this kind of mortgage.

LONG TERM INVESTMENT

This is a long term investment which you hope will generate rental income along the way and a profit when you sell the property, but bear in mind that if you need access to some cash a property can take time to sell or re-mortgage.  If house prices fall, you might not be able to sell for as much as you had hoped.

You would have to make up the difference if the property sold for less than you owe – a risk that increases, the higher the percentage you borrow. If you sell for a profit, you may have to pay capital gains tax.  Don’t forget that with a variable rate mortgage, your costs will rise if interest rates go up.  This would eat into, or even wipe out, your income and profit.

INSURANCE OPTIONS

We understand that property investment can be a risky method of raising money, which is why we have access to a wide range of landlord insurance options to keep the financial risk as low as possible.

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