Property Seminar Tips: Understanding Buy-to-Let Mortgages

If you’re thinking of investing in UK property to rent it out, you might require a mortgage to fund the purchase. Buy-to-let sales require specialist mortgages, which differ in many ways to conventional mortgages – here’s more information.

Are you Eligible for a Buy-to-Let Mortgage?

Buy-to-let mortgages are only suitable for investors who want to purchase a property for rental purposes. To successfully apply, you’ll need to prove:

• That you own an existing property. It’s highly unlikely that any mortgage lender will offer you a buy-to-let mortgage if you don’t already own a home. However, you won’t necessarily need to own the house outright – if you’ve got an existing mortgage, that’s not a problem.

• That you earn a sufficient salary. Generally speaking, mortgage lenders will only consider you if you’re earning £25,000 or over per year. Investors on lower salaries are regarded as being too ‘high-risk’.

• That you’re the right age. Regrettably, mortgage lenders tend not to approve mortgages if you’re over a certain age (for fear that you might die before being able to pay it back)! Usually the upper limit is 70 to 75 – at the end of the mortgage term, not the start.

What’s the Difference?

There are a few major differences between standard and buy-to-let mortgages. Usually, buy-to-let mortgages are interest only, which means you’ll need to repay the capital in full at the end of the mortgage term.

The interest rates are often higher too, though at present, many lenders are offering cheap rates, in a bid to stir up more market interest. Product fees are also more expensive than traditional mortgages.

Applying for a Buy-to-Let Mortgage

If you’ve already identified a great buy-to-let property for sale, the next step is to sort out your finances. Most banks offer buy-to-let mortgages, and some specialist lenders do too – it’s worthwhile shopping around first before committing, as some products are better than others.

Always make sure that you’re not borrowing more than you feel comfortable with – if you’re concerned about finances, talk to a financial advisor before committing.

Finding the Right Buy-to-Let Property for Sale

Generating great ROI depends largely on the property you invest in. Buy in the right area, at the right price, and you should enjoy both solid rental income and long-term capital growth. However, if your profit margins are too tight, you won’t make much money from it, so it’s vital to purchase wisely.

A good property investment agent can assist with this process, helping you to find a great buy-to-let property for sale that matches your needs. They can also offer advice regarding financing.

The Buy2Let Shop Limited

If you’re thinking of investing in property in the UK and aren’t sure where to start, talk to The Buy2Let Shop. Our team of professional property investment agents are on hand to help with every stage of the purchase – and we also hold regular property seminars, which cover everything you need to know about becoming a landlord and developing a successful property portfolio.

To find out more about our range of services, simply get in touch with us via The Buy2Let Shop website today.