A buy-to-let mortgage, is designed for borrowers who want to buy a property to let out to a third party (e.g. tenants). The amount that the buy to let landlord receives in rent may be over and above the mortgage payments and will help to offset the management and maintenance costs of the property.
There are currently several competitive buy to let mortgage deals on the market that are specifically aimed at the buy-to-let sector. These range from special offer buy to let mortgage deals to variable and fixed rate options. UK mortgage lenders will often assess buy-to-let mortgages on the earning potential of the property (i.e. the rental income) rather than affordability. However in more recent times the decision is based on the estimate given by the surveyor as to what the rental might be.
There are 3 main differences in buy to let mortgages:
Becoming a private landlord should not be seen as a way of making easy money. It can be risky and very time consuming, more than most forms of investment, and there is no guarantee that house prices will continue to rise. There are a number of tax issues that need to be looked at in order to maximise your tax position, such as being able to offset your maintenance costs, letting agent fees etc as well as any interest paid on a buy to let mortgage against your tax.
If you have one or more buy to let mortgages and you want to maximise your income, switching lenders or finding a new product with your existing lender is worth investigating. At Professional Mortgage Services we will review your requirements to establish which lender is offering the best product based upon your individual needs.