If you are looking at buy to let mortgages, best buys can be hard to find. But this article will help you find your way through what can be a bit of a minefield.
History and Overview
in 2008 and 2009, the global economy has taken something of a nosedive. Whereas just a few years ago, many investors were taking out buy to let mortgages to buy rental properties, that is something that is now happenign a lot less.
The reason for this is that many of those rental properties are now worth significantly less than they were. Mortgage lenders have been forced to foreclose on many of these loans and as a result, they are now becoming much more stringent in their offers.
What kind of deals are currently available?
Mortgage lenders are offering a lot less than they were. In some countries (such as the UK), only 5% of the deals that were available in late 2007 were still available in mid 2009. Borrowing is more difficult, with lenders requiring not only larger deposits, but also charging higher interest rates even though bank base rates have decreased.
But there are still deals to be had. You just need to be able to show the lender that you are offering them a sound inves
Photo by Dominic’s picstment. If you can prove that the property will have a decent rental income, than you should be able to borrow up to three times your annual salary plus 50% of the annual rental profits.
What types of mortgages are offered?
These are some of the types of mortgage that you might be able to get on a buy-to-let deal:
- Fixed rate
- Variable rate
- Discount rate for early repayment
- Cashback mortgage
- Interest only mortgage
Other Points to Consider
Treat your rental property as a business, and your mortgage application as if you were a businessman seeking an investor. In effect, this is what you are doing. When seeking out buy to let mortgages, best buys can be found when you offer the mortgage lender a low-risk, high-return proposal.
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