Buy to Let Mortgage & Remortgage Advice
What is a Buy-to-Let mortgage?
If you would like to buy a property with the aim of letting it out to tenants this option would be suitable for you. There are many reasons why you may buy a property to let such as buying a house for your child at university, or investment as part of your future pension plan, however the most common reason is that it is simply an investment opportunity. Property has always been considered a profitable investment and the demand for the rental market has certainly increased for both long and short term rentals due to changing working patterns. However ensure that you know your market before buying. The Association of Residential Letting Agents (ARLA) says most landlords should be able to get gross rent equivalent to between 7% and 10% per year of the value of a property. The term of this type of mortgage can range from 5 to 45 years
Through a buy-to-let mortgage you will benefit from any appreciation in the capital value of the house itself and your loan repayments will be met by the revenue acquired by letting. A key difference to normal residential mortgages is that the lender will use the rental price as an income when considering the borrowers ability to make repayments.
What is involved in becoming a landlord?
Before deciding to go down this route it would be useful to read through the leaflet ‘Buying to Let’ produced by the Council of Mortgage Lenders (CML) and consider all the aspects involved with becoming a landlord.
As a landlord you will acquire a range of responsibilities with your new property such as the upkeep, maintenance and your buildings insurance. You will also have to ensure that any gas or electrical equipment meets safety standards by testing annually.
What are the risks of buy-to-let mortgages?
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You must be able to keep up with the mortgage repayments even if the property is empty as there may be a period of time between tenants moving in or out. If you cannot make these repayments you may risk losing your property.
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Be aware that if you buy a property in a run down area, it may be cheaper however renovations may be costly.
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You must also be wary about the type of tenants that you attract as troublesome tenants may end up being extremely damaging to your investment.
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You may have to sell your property during a property slump which means that you could end up losing out. This is a general risk of investing in property.
Buy to Let Advice:
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Go for a high quality rental as this type of accommodation is likely to attract more reliable tenants.
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You need to charge a high enough rent price to cover your mortgage repayments.
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Your rent price needs to cover time periods when your property may be empty.
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Ensure that you have enough savings for repairs and general maintenance such as gardening.
Get a Quote from multiple Buy to Let companies:
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Fill out the simple – no obligation form
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Wait for qualified advisors to get in touch and discuss your personal circumstances.
Jargon Buster: Buy to Let Definition >>
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE
The actual rate will depend upon your circumstances. Ask for a personalised illustration. There will be a fee for mortgage advice. The fee will normally be 2% of the mortgage advance, minimum of £950 and a maximum of £3000.The fee can usually be added to the mortgage amount.
Enable Finance Ltd. is authorised and regulated by the Financial Services Authority for mortgages and non-investment insurance. Buy-to-Let mortgages are not normally regulated by the Financial Services Authority.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE