Buy To Let Mortgages
Buy to let mortgages are designed for people that wish to purchase a property and then let the property out. The buy to let mortgage can either be interest only or capital and repayment the option is yours.
Most buy to let mortgages require a deposit of at least 15%of the property value. They will also require the rental income to be at least 130% of the monthly repayments. If you are able to raise the capital for the deposit a lot of money can be made if the property value increase of the period of time, this is know as the capital growth. The income received against the mortgage payment is called the yield and based on a percentage of the return.
But to let mortgages have been very popular in resent times and have fuelled the growth in the property market. The main point to consider once you have chosen the property is to do your homework on the types of mortgages available. As the buy to let market is so popular the lenders have designed specific products.
You must understand that if the property remains unlet the mortgage repayment must still be met.
The lenders to not take in to consideration your income they judge the risk on the property and the rental income the property will achieve.
As with all mortgages there are costs to consider and also penalties if the mortgage is paid off early.
