Buy to Let Mortgage Deals
- Author Michael Hatfield
- Published March 4, 2010
- Word count 447
Buy to let mortgage deals have gained immense popularity in recent times. Many people indulge in buy to let mortgages to earn profits as well as for a safe and secure retirement plans. The basic idea behind a buy to let deal is, to mortgage a house and then pass it on to another person for residential or commercial purpose. The rent one desires is naturally higher than the mortgage payments. This becomes a good and steady source of income.
When you invest your hard earned money into a mortgage, then it is obvious that you aim for high rates of return. Currently, in UK there is space for buy to let investors to lay their hands on worthwhile property and then rent it out. A lot of people wonder why people rent houses when they themselves can mortgage it. There could be a hundred reasons why one prefers to rent out a house rather than buying it. In a buy to let mortgage deal you would be expected to sell out 20%-30% of the property’s value. At the same time there may be a higher rate of interest associated to such a deal. Keeping this initial cost and the maintenance cost, you must determine your rent.
The next big question is that what if you fail to rent out the property? You must always try to get the best deals. But do not compromise on the quality and location of the property in your zeal for best rates and deals. It is inevitable that you mortgage a house in an area where one might desire to stay or one which would be a good place to start work. There are different types of mortgage deals available for buy to let. For this you need not go around hiring and consulting expensive mortgage advisers. After all, why pay exorbitant advisory and consultancy fee when you have free access to an ocean of information through different websites. If you like to play it safe always then rely on a fixed rate mortgage. However if you are an optimist and foresee a fall in bank rates then perhaps you would like to side with variable rate mortgages. If you are looking for a deal between these two options, then look out for a dealer who provides capped interest rates. Here the upper limit would be fixed.
You could give a green signal to any of the aforesaid mortgages but remember to do a detailed study of your financial position, regular expenses and also forth coming expenses if any. Also keep some space for contingencies in your financial planning. After all, it is better to be safe than sorry.
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