People choose to
buy to let for a number of reasons, this could be for the security
of a second property if they already cohabit, or simply for the
purposes of business. A
buy to let mortgage can be based on the rental income, where the
mortgage lender will agree a fixed percentage of that amount repaid.
It could also be based on the annual income of the
prospective borrower or it could be a combination of both the above
points.
Buy to let
mortgages have added bonuses in comparison to regular home owner
mortgages, for example the base rate of interest is often lower.
As with all mortgages, the longer the fixed rate repayments
are, the higher the interest will be overall.
It is important to
consider the problems that are associated with buy to let mortgages.
For example the monthly repayments need to be guaranteed or
the property could be at risk of repossession.
What would happen if the tenants did not pay or were late to
pay each month? The
standard of the property must reach the required government standard
consistently and eviction is extremely difficult if the tenants are
less than ideal. Property
and building insurance is highly recommended to protect against any
unforeseen damage to the property.
