What is a Buy to Let Mortgage?
A buy to let mortgage is basically a mortgage designed for people who are buying property to rent out to tenants. They have no intention of moving in themselves, they are just looking to purchase a property and immediately find tenants to rent it.
To be eligible for a buy to let mortgage, you need to be able to show that the rent you will be bringing in will be at least 125% of the mortgage payment. You will also have to show your existing financial circumstances and will have your credit score checked before the decision will be made by the lender.
This type of mortgage is not quite as easy to get as it was just a few years ago. The global financial crisis has affected the amount of money lenders will risk and this market is no exception. But they are still available if you search hard enough and will offer a better deal than a normal mortgage possibly would.
Obviously there are other things to be considered when looking for a buy to let mortgage. You first need to find a property that would be suitable and to make sure there are people searching to rent homes in that area. Otherwise you may struggle to find a tenant for your new property and will be paying the mortgage yourself.
A letting agent can be a very good idea to contact in the area you are thinking of buying in. They will be able to advise you if there are people searching and also might be able to look after your property for you and find the tenants. They will also be able to sort out the correct paperwork too.
So those are the basics of the buy to let mortgage and the benefits it has. It is a great way for people to buy a property and immediately have tenants paying the mortgage for you. That way in 25 years or so, the property is paid for and you could sell for a large lump sum of money.
