Not many landlords can afford to purchase a buy-to-let property outright – and even those that can often choose to use a buy-to-let mortgage instead.
However, choosing the right buy-to-let mortgage can be a bewildering process. It’s estimated that there are over 1,000 different mortgage products available to new landlords; and no two are exactly alike. The big question is – which one is right for you?
Buy-to-Let Mortgages – Some Key Facts
When you’re about to purchase a buy-to-let property for sale, and you’re looking for funding, you’ll need to be aware of the following:
What Sort of Mortgage?
In the past, the most popular choice was a tracker mortgage, which meant that the rate of interest you pay follows the Bank of England’s rates. However, fixed rates are becoming more popular; possibly due to the stability that they offer. With a fixed rate mortgage, you know exactly what you’ll be paying out each month, which is useful when you’re budgeting.
It’s likely that you’ll choose an interest-only mortgage- which means you’ll only be paying off the interest each month, not the actual price of the property itself. For a landlord, this isn’t necessarily a problem, especially if the house increases in value in the future.
What Mortgage is Right for You?
Before visiting a mortgage lender, we recommend shopping around. It’s never been easier to do your research, as there are several comparison sites online that you can use, such as MoneySuperMarket or Which?.
Talk to other property investors too. Find out what mortgage product they use, and what their experience has been. Recommendations always come in handy if you’re not sure which mortgage is right for you. Remember, other professionals can also offer help and guidance – such as independent financial advisors or property investment agents.
Getting Tips on Financing
If you’re feeling out of your depth, don’t panic! There are plenty of ways that you can bring your knowledge up to speed. For example, attending a property investment seminar is a great way to find out more about the industry, and get advice and tips from professional property experts. There are also several great books, YouTube videos and online publications that offer lots of guidance.
Property Investment Seminars – The Buy2Let Shop
The Buy2Let Shop host regular property investment seminars in London, and across the rest of the country too. If you’d like to attend one of our free events, or simply want to find out more, visit The Buy2Let Shop website today.