If you are considering a buy to let mortgage, then make sure you understand the basics. At a time of economic gloom such as this, making the right financial decisions is more important than ever.
Buy to let mortgages are specifically designed for people who want to really get stuck into the property market and buy one or any number of properties to then let to tenants. The owner's benefit is then being able to cash in on the capital value of the house itself. The loan repayment can be met by ensuring occupancy of the houses. The only question is, is this still a viable investment anymore? With house prices falling dramatically, one has to wonder if a buy to let investment is really worth it. The profit that was once readily obtainable has probably dropped significantly.
With the buy to let phenomenon driving house prices over the last few years, it may well just start to slow down now. However, one thing does remain, and that is the need of rental properties. With students guaranteed to need accommodation, this could be a good investment. Also, those on low incomes that have been refused a mortgage because of the recent credit crunch, will be desperately seeking rental properties at reasonable prices. Both parties could win here - the tenants and the landlord - if both are prepared to 'give' a little.
Buy to Let Mortgages specifically allow the rental revenue to be considered as income when considering the ability of the buyer to meet the ongoing mortgage payments. This is a huge advantage for many mortgage lenders and tenants. The terms of buy to let mortgages are likely to be somewhere in the region of 5 to 45 years, although this could indeed waiver as the economic slump hits us.
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