Are you considering buying a property to let out to a tenant? Have you been looking for an extra source of income by means of owning a rental property?
Buy to let mortgages (BTL) are very popular because they allow you to immediately become the owner of a property that will one day be your own, and at the same time you are operating your own business which generates a side income. The great part about BTL mortgages is that you can continue doing your regular work whilst getting a steady income from your rental.
You don’t have to be some high-powered or experienced investor to begin your foray into the world of BTL, and such ventures are suitable for those just starting out in the rental market. For the most part, those wishing to borrow will take out a mortgage which is only based on interest.
This means that you will be paying off just the loan interest each month as it builds up, and comes directly from the rent you’ve collected on the property by renting it out to a tenant. The final payment, the full cost of the mortgage, is then settled at a later date – more often than not by putting the property on the market, but there is also the possibility of taking out yet another mortgage.
You can expect a BTL mortgage to cost more than a regular residential one, and the majority need you to put an upfront deposit of anywhere from 20-40% on the property to secure it. Upfront fees will be more substantial and interests rates are guaranteed to be higher, as well as the fact that stamp duty is due on properties you purchase which are not classed as your primary residence.
BTL mortgages have both advantages and disadvantages, all of which can be discussed with one of our friendly and informative specialist mortgage advisors here at Charles & Derby Estates, so give us a call today or stop by our office and get the ball rolling on your buy to let adventure!