Buy to Let

Many people still consider property to be a sound investment, given the usual caveats of buying the property at a good price and getting the right mortgage.

When a mortgage is taken out for a property that will be let, your potential rental income is a more important factor than your normal household income.

For this reason, if you wish to invest in ‘bricks and mortar’ then you’ll need a specialist financial product; a buy to let mortgage.

A buy to let mortgage is a specialist product and, as with all mortgages, it requires you to fulfil certain criteria before you’re considered to be eligible; criteria that are much stricter since the credit crunch began.  So for example, while your normal level of income may be an eligibility factor, most buy to let mortgage lenders will take into consideration the value of the property you wish to buy and the rental income you are likely to achieve when letting it out.

Property Value

The amount of money you can borrow will be affected by the value of the property.  Buy to let mortgages are rarely available for more than 75% of the value of the property, which means you’ll be working closely with your mortgage advisor to make sure that you’re aware of the best buy to let mortgage deals available.

Rental Income

It is likely that you’ll be expected to achieve a minimum of 125% rental income when compared with your monthly mortgage repayment.  It’s essential to minimise your mortgage repayments to maximise your rental income.