If you are looking to buy a property for investment and you want to rent it out, then you should look at getting a buy-to-let mortgage. Buy-to-let mortgages are a relatively new concept, but can be a great tool for would-be property investors. If you are interested in learning more about buy-to-let mortgages, then here is some information that might be of use.
Buy-to-let mortgages are great because they allow you to get the mortgage for your investment property even if you don't have the necessary capital to currently make the repayments along with your normal mortgage. They are also becoming more popular because the interest rates on them are getting closer to traditional mortgages.
Buy-to-let mortgages are a little bit more expensive than traditional mortgages, and usually have 1-2% higher interest rates. However, the prices are reducing as more and more lenders begin to offer them, and you can find really good deals. The other costs of a buy-to-let mortgage are fairly similar to a regular mortgage, although the way that the amount you can borrow is calculated is slightly different. With buy-to-let mortgages, the amount that you earn and the amount you can potentially make from rent is considered in order to calculate how much you can borrow. In general, the rent that you can generate should be about 130% of the mortgage payments. You can usually borrow up to 85% of the property value, although if you can put down around 25% of the property value then the rates will be better.
More and more lenders are operating buy-to-let mortgages, and so it pays to look around for a good deal. The Association of Residential Letting Agents is one major source, with them operating a buy-to-let property mortgage scheme. However, there are many other providers as well, so you should compare prices before making any decisions.
Perhaps the biggest advantage of a buy-to-let mortgage is that you can borrow more money than you can afford on your current salary, because the rental income is taken into account. This means that you can get a more expensive property and hopefully make more money from rental income. Of course, you need to make sure that you can afford the repayments if things should go wrong and you have no tenants. However, if you get the right buy-to-let mortgage then you will be able to get the investment property that you want.