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Which Buy to Let
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Today, there are approximately 45 Buy to let mortgage lenders offering over 300 different products. Each one is based on different lending criteria.
With so many lenders competing for business, borrowers have a number of options. They can choose between many buy to let best deals currently on the market.
A Buy to let mortgage is essentially a specialist loan secured against the property. Due to the inherent risks of this type of loan; lenders rates are typically higher than standard residential mortgages.
Once an application is submitted, the lender will decide whether or not to approve your loan. This decision is based on the likely rental income of your property and not your salary, as is the case with a domestic residential mortgage.
The lender approves your application by applying a rent to interest cover calculation; usually around 130%. In other words, the rent collected by your tenant has to cover the interest on your mortgage by 130%. Each buy to let mortgage lender will have a method in place to calculate the amount you can borrow.
Click here to see various examples of this
When you make your application for a loan, you need to be clear on which buy to let mortgage you want for eg. whether you want an interest-only or repayment mortgage. Obviously this decision will depend on your investment strategy.
For example, a repayment method is suitable for someone looking to build a pension fund. However, the investor's goal with an interest-only mortgage is to build up a buy to let property portfolio by re-gearing to release equity. In this way, they can fund further purchases.
Beware: A Buy to let mortgage is not regulated by the
FSA (Financial Services Authority),
unlike domestic residential mortgages. Make sure you obtain good buy to let advice from an independent, reputable broker
Buy To Let House Insurance
Buy to let house insurance (also called landlord insurance) is similar to the buildings and content insurance policy you have for your home.
How To Obtain The Cheapest Buy To Let Insurances
How to obtain the cheapest Buy to let insurances today is a lot easier than what it used to be. There are a lot more insurance companies in the market competing for your business.
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» Get the Low-Down in the Buy To Let Mortgage Guide
Confused about mortgages for your buy to let property? Find out all you need to know in the Buy To Let Mortgage Guide.
» Find A Cheap Buy to Let Mortgage
A cheap buy to let mortgage is available if you know where to look. I'll teach you how to find the best deal…
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