Buy To Let Mortgages - Things To Consider When Getting A Buy To Let Mortgage

If you are thinking of buying a property for the purpose of letting it out as a financial investment, then you will need to arrange a buy to let mortgage in order to do this. Buy to let mortgages are generally speaking more expensive (i.e. you pay a higher interest rate) than if you intended to be an owner occupier which is a disadvantage of a buy to let mortgage, on the up side though buy to let mortgage lenders will take into account your buy to let property's expected rental value (rather than just your own income) when deciding how much they will be prepared to lend you. One way round the higher buy to let mortgage rate is to remortgage your existing property and use those funds instead of a buy to let mortgage, if of course you have sufficient equity to do this.

Most buy to let mortgage lenders require you to provide a deposit of between 15% to 20%. Before you go ahead with your buy to let mortgage investment, you will need to consider that there is risk invloved in buying to let and that usually your rent will need to be between 130% and 150% of the mortgage interest value in order to cover your costs. This is because of insurance costs, maintenance costs and paying an agency to find a tenant for you and deal with the property management. An agency can charge you between 10% and 15% of the rent for this service. Something else that could effect your buy to let mortgage investment is how much of the year your property is vacant. Agents suggest that you assume that your property will be vacant for at least 1 month in every year when calculating your figures.