Buy-to-Let Mortgages

If you have plans to rent out your property to tenants, then this is the mortgage for you.

This mortgage is usually based on how much rental income you are expected to get from the property. Most lenders will assert that the annual rental income is to be 125% of the annual interest repayments.

However, capital rising can see this rise to 145%. Check with your broker on this.There is usually a minimum age of 25 and a minimum income of £25,000 per year to qualify for this kind of loan.

It is also important to bare in mind that property value and your tax rate can also dictate lending.

Is it right for you? Here's what you need to weigh up..
Pros:

Renting out your property is an investment that will mean your mortgage is paid for each month

Not only can your mortgage be covered, but you can also earn extra income through renting out your property

Cons:

If your property is unoccupied for any period of time, you will have to cover the mortgage yourself

Most lenders usually ask for a higher deposit on Buy-To-Let mortgages, usually 25%, but it could be 40% or more


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