Buy to Let Mortgages

Like any investment, buy to let comes with no guarantees, but can be more reassuring for those who have more faith in bricks and mortar than the stock market.

A buy to let mortgage is designed for people who want to buy a property to let out. With having access to the whole mortgage market, Mortgage Advisors in Oxford can find the best deal for your circumstances and can also source deals for;

Student Let's

Houses of Multiple Occupancy

Buy to Let Portfolios

 

Deposit

The deposit you will be required to put down for buy to let mortgages will be typically larger than a standard residential mortgage. The borrower will usually be required to put down at least 20% desposit and normally expected to own their own property.

 

How much can I borrow?

For buy to let mortgages, lenders usually calculate how much you can borrow based on the potential rental income from the property instead of your annual earned income. The expected rental income usually must exceed 125% of your monthly mortgage payments. Mortgage Advisors in Oxford can obtain an accurate borrowing figure based on investment property. 

 

Investment

Like any investment, buy to let comes with no guarantees, but can be more reassuring for those who have more faith in bricks and mortar than the stock market.

Buy to Let Best Buys

Buy to Let Mortgages

Your home is at risk if you do not make the payments on a mortgage or loan secured against your property.

 

Max LTV

Initial rate

Term

Comp fee

Booking fee

Incentive

Early repayment
  charges

   

75%

2.39% Fixed

31/10/2016

2.5%

£150.00

Free Valuation

5% until 31/10/2016

 

 

75%

3.79% Discount

31/10/2016

2.5%

£150.00

Free Valuation

5% until 31/10/2016

 

 

75%

2.75% Discount

31/10/2016

2.5%

£150.00

Free Valuation

5% until 31/10/2016

 

 

80%

3.75% Fixed

31/10/2016

£1800

£150.00

Free Valuation

5% until 31/10/2016

 

 

80%

4.99% Fixed

31/10/2016

£995

£150.00

Free Valuation

5% until 31/10/2016

 

 

80%

3.99% Fixed

31/10/2016

0%

£150.00

Free valuation

5% until 31/10/2016

 

 





Becoming a private landlord should not be seen as an easy way of making money. It can be riskier and more complicated. It can also be very time consuming, more than most forms of investment, and there is no guarantee that house prices will rise. That said, having a second property to let to tenants could reap considerable financial rewards over time.

There are 3 main differences in buy to let mortgages:

When buying a second property to let, you will need to decide whether your primary objective is income or capital growth. In other words, are you looking to make a profit month on month or are you looking to make a profit through increased equity from the second property if it increases in value over time? The decision may affect the type of property you purchase, and the location.

When you manage a property there are many costs involved in addition to the monthly mortgage repayments. As a guide, you should be aiming to achieve a gross rent of about 135% of the rental property's interest only mortgage repayments in order to cover your costs should anything go wrong.

 

These additional costs include:

When choosing a property to let, it is wise to take advice from local letting agents to determine; what types of properties are in need and which parts of the town are best or most wanted. They can tell you if there is a University in the town, and if students are looking for somewhere to live. 


Property upkeep - maintenance costs for the property.

Letting agent's fees - letting agents charge around 10% of the monthly rent for finding and vetting tenants with an additional cost of around 5% if you require a full management service.


Ground rent / service charges - applicable to leasehold properties.

Legal insurance - to cover costs from evicting tenants in the event of non-payment, very important, as this can be very expensive.


Insurance - building insurance and contents insurance for the items provided as part of the rental agreement.


Furnishings - the purchase of any furniture. If the property is to be let furnished, make sure you are covered for this by your home insurance.

Gas / electrical appliances - cost of maintaining appliances and ensuring they comply with any regulations such as safety tests.


Decorating costs - the property may require work ranging from painting, to a new bathroom suite before it is suitable for letting to tenants.

Rent Potential - the decision as to whether or not a mortgage will be offered is usually based on the rent you will earn as well as your income. In some cases your income is not ever considered.


Interest Rate - buy to let mortgages have slightly higher interest rates.


Larger Deposit - typically a minimum of 20% or 30% of the property's value is required as a deposit. The larger your deposit is, more lenders & mortgage schemes will become available to you.

 

Your home may be repossessed if you do not keep up repayments on your mortgage(s). The Financial Services Authority does not regulate some forms of buy to let.

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