Buy To Let Mortgages By Buckingham James
Buckingham James is an experienced adviser in the Buy to Let market and provide individual mortgage advice specifically tailored to our clients highly personalised needs.
Becoming a private landlord should never be seen as an easy way of making money. It can be risky and complicated. It can also be very time consuming, more so than most forms of investment, and there is no guarantee that house prices will rise. With that being said – owning a second property that is rented to tenants can reap considerable financial rewards both in capital growth and income over time.
There are 3 main differences in buy to let mortgages:
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 even considered.
Interest Rate – buy to let mortgages have slightly higher interest rates than owner occupied properties.
Larger Deposit – typically a minimum of 20% to 25% of the property’s value is required as a deposit.
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.
Also, when managing 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.
At Buckingham James, we have access to whole of market schemes and can help you decide which is going to be most suited to your objectives and longer term goals.
NB: Some forms of Buy to Let mortgages are not regulated by the Financial Conduct Authority
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