Everything That You'll Need and Require to Gain a Buy To Let Mortgage...

The buy to let mortgage is a lending arrangement specifically for the letting market. Normally a mortgage contract stipulates that no part of the property is to be let to a third party or used for business purposes. This means that for the aspiring landlord buy to let mortgages are required.

Speak To A Financial Adviser - If you're not an expert on mortgages the best thing to do is speak to an adviser or a broker who know the market and will know the best lenders to approach, as well as the best products that are out there.

Lenders who are entering into arrangements with buy to let mortgage borrowers will still usually require that the borrower have an income. Should the property be empty for any period of time, the lender wants to be sure that you can still afford to repay the mortgage. Most tenants tend to have short term let's so the likelihood of properties standing empty for some part of the time of the loan is high.

One of the main advantages of a buy to let mortgage is that you don't typically pay it. Whereas the repayments on your own mortgage are made from your income or capital, it is usually the rental income you receive from your tenant which pays your buy to let mortgage.

Until the Credit Crunch in 2008, Buy To Let's were incredibly popular as house prices sky rocketed in price from the 1980's onwards, 90% added value in some cases was not uncommon. With the drying up of mortgage availability and the house prices contracting, they have dropped off sharply and as of the time of writing, are still to recover.

How Much Deposit on a Buy To Let? - Currently you can expect to be asked for a minimum 25% deposit from lenders, when that will drop is anyone's guess. But as But To Let's are normally second properties, it signals most landlords have money to burn, so if you're a newcomer to the market, you have a uphill battle. Those seasoned in the market just have to work that bit harder to find an agreeable mortgage.

Make Sure You Research The Market - As with other financial products, it is vital that you undertake some research when deciding on a buy to let mortgage. Deals and criteria can vary significantly from lender to lender and so it is important that you shop around to find the very best buy to let deal for you.

Cover The Building - Most lenders will require that you take out buildings insurance so that if any damage is done to the building, it's covered as the property is the security for the buy to let mortgage. This will also protect you as you won't have to foot the bill for certain structural repairs like broken roof tiles and windows.

Location is crucial - Buying an investment property also requires careful research. You should make sure you buy in a location with strong rental demand as this will not only ensure that there is a ready supply of prospective tenants but should also ensure that rents remain high.

The market for buy to let mortgages has tailed off since investment properties are not so popular, after the property market fell in recent years, but there are some good products still available so have a look around.


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Timothy Frodsham writes for Just Commercial Mortgages.com the UK's No.1 site for the latest commercial mortgage rates and commercial property finance news.