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Buy To Let
Buy to Let Mortgages specifically designed mortgages for people who wish to invest in the property market and let their newly purchased property out to tenants. The owner can then benefit from appreciation in the capital value of the property itself. They can also (usually, if invested wisely) maintain the property and meet the mortgage loan repayments from the income made by letting the property out. The buy to let boom of recent years has forced house prices higher, whilst making a wider range of rental accommodation available.
Buy to let mortgags differ from normal mortgages as they take into account rental income when considering how well the buyer can meet ongoing mortgage repayments. With regards to the differences between buy to let mortgages and a standard mortgage, the lender is likely to be restricted to around 80% LTV (Loan to value), the term of a buy to let mortgage as with normal mortgages is usually in the region of 5-45 years. Interest rates for a buy to let mortgage are slightly higher than that of a standard mortgage.
It is extremely important to know the local market to where you intend to invest. Most successful investors know alot about the area they are investing in and/or invest in the area in which they already live and are familliar with. It would be an idea to get a letting agent who knows the area to help you, giving you an idea of local demand and the likely pitfalls etc. A primary concern is to avoid void periods (the time which your investment lies un-tenanted, thus giving you no income) although some void periods are inescapable, doing extensive initial research before you invest should give you a chance to minimalise the length of time of the void periods.
Most high street banks and building societies offer a buy to let mortgage product. An Independent mortgage broker will also be able to recommend mortgage arrangements which are not available on the high street and which could be more suited to your buy-to-let mortgage requirements.
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