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Buy To Let Investments - Choosing Your Mortgage
PROPERTY ADVICE BLOG - Buy to Let - The right mortgage for you...
Choosing a buy to let mortgage.
When it comes to buy to let mortgages there are two main types you will need to choose between - a repayment mortgage or an interest-only loan.
With an interest only mortgage, lenders are often looking for a suitable investment product, while with a repayment mortgage, some lenders may ask for life insurance in conjunction with your loan. Other options include fixed rate and variable rate mortgages. A fixed rate loan should provide you with some certainty about your monthly repayments whilst variable mortgage rates can change from month to month.
PROPERTY ADVICE BLOG tip!
Before you choose a buy to let property mortgage, take some sound property advice from an independent advisor or mortgage intermediary, in order to help you consolidate your ideas.
What are the additional costs?
In addition to monthly mortgage repayments you could also have to pay for:
• Building insurance
• Content cover for furnished properties
• Maintenance costs
• Dry periods when you don’t have tenants.
• Extra rent if tenants fall into arrears.
• Interest rate growth and related mortgage repayments.
Questions to consider before choosing your mortgage
• Have you received advice from a variety of mortgage consultants?
• Have you thought about how rising interest rates could affect you?
• Do you have enough savings or income to pay for tenants who leave, rent arrears or if the property is empty?
• Is the mortgage affordable and will I be able to pay it in the long term?
When it comes to buy to let mortgages we recommend you consider all of these questions before you sign a contract. In addition you should get independent tax, legal and property advice from qualified specialists who can help you to see all the disadvantages and benefits of this investment method.
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