When you buy a property as an investment, you won't be able to fund your purchase with a normal residential mortgage. Instead, you'll need a specialist buy-to-let mortgage.
A buy-to-let mortgage is a type of home loan for buying a property that you intend to rent out to residential tenants for a profit. Most buy-to-let mortgages in the UK are interest-only, with the landlord paying the monthly interest using rental income.
Buy-to-let properties come in all shapes and sizes, from houses to apartments and everything in between. Unless you own a property outright, it is usually against your lender’s rules to rent it out without taking out a BTL mortgage.
Besides the fact that the property’s owner is unable to be a permanent resident there, the main difference between a buy-to-let and a residential mortgage is the way affordability is assessed. With BTL, it’s all about the strength of the investment, with lenders calculating this based on rental potential. The projected rental income has to cover the mortgage payments, calculated at current and possible future interest rates.
In the video above, I run through a number of key points, including:
Do I qualify for a BTL Mortgage?
How much can I borrow?
Buying through a limited company or as an individual?
Which mortgage product is the best fit for you?
I hope you enjoy and if you would like to learn more about how a Buy-To-Let Mortgage works, please click on the ‘book now’ link below, and I look forward to talking to you all very soon!
Chris Hynes Calendly - Book Now
Wealthi UK - https://www.wealthi.com.au/uk