Buy to Let Mortgages Explained

Buy to let has become an attractive investment option for many people as soaring house prices, increased demand for rental property and better legal protection for private landlords has made buy to let fast growing area of the mortgage market.

Many lenders now offer specialist buy to let mortgages that allow private landlords to fix their interest payments for five years or more, providing you with some security over mortgage funding costs.

Amendments to the 1988 Housing Act has reduced the fear of landlords that tenants, once admitted to the property, will prove all but impossible to evict. This possibility alone was enough to dissuade many people from becoming private landlords in the past. The proportion of UK housing stock taken by rentals stood at a low of 7% in 1989, but has grown to 11% in the ten years since.

Most landlords should be able to obtain gross rent equivalent to between 100% and 130% of the rental property's mortgage repayments (interest only). Letting agents will charge up to 10% of the rental. Some may charge 15% if they are responsible for such things as repairs, complaints and other matters.

Buy to let mortgages and properties have become increasingly popular in the UK over recent years. These mortgages do not differ too greatly from other mortgages and do require a deposit which varies from lender to lender. You can usually find discounted, fixed, base rate Tracker rates and flexible Buy to Let mortgage rates to suit most short and long term financial planning needs.

Historically, borrowing on income-producing property has been viewed by lenders as a commercial proposition so they attracted higher rates of interest than the standard mortgage offered to owner-occupier, however this is no longer the case.

There are a number of factors which require to be taken into account however when considering this type of venture and therefore the broad appreciation of how both product lending criteria and interest rates work does benefit from a more professional approach and one which takes into consideration other factors which could benefit you financially. Factors such as how tax relief can be employed as well as being made aware of the many obligations which go along with being a 'landlord'.

For a full and frank appreciation of how this type of scheme may work for you simply contact Flexible-Finance who will arrange for you to be able to explore the possibilities which may await you with this type of scheme.