Buy to let mortgages

Buy to let is very much a preferred and chosen type of investment at the moment, especially over the last few year s whilst there has been a global recession. It makes it easier than perhaps a standard mortgage as it does not regard your actual income but the general state of the property and the ability it will have to provide an income to pay the interest and repayments on the loan.When finding a property which you want to buy to let you have to think about the level of rental income you expect to get in comparison to the mortgage cost on the building. Lenders usually expect 130% more than the mortgage cost or even more. This is to cover any extra costs after the mortgage has been paid and to maybe make a profit. So just say you had a rental price of £800 then your mortgage cost should be no greater than £615, this means there is enough money to cover costs. However if there are slow months and you cannot find a tenant, you will in fact be losing money so the idea is to find a property which has a high renting value and a low mortgage. It’s good to buy a property cheap, fix it up and this will make the rental price higher. This means it will be easier to cover costs on slow months as the mortgage will be fairly low. However sometimes it can be quite costly to fix up a property, especially if it’s your first buy to let. If you cannot fix a property up because of costs then there are still hidden gems which have low mortgages and high rental value.Usually when a landlord is buying to let mortgage companies and banks require a 15% deposit and if the interest cover requirements are not met you will have to pay an even higher deposit. This does however mean that your mortgage monthly payments can be reduced and this will fit the interest cover. There are many online companies and specialist mortgage companies who will give you a buy to let quote easily, do your research though and do not settle for anything less than you need, some companies have a habit of hiding big details such as long tie-ins and so on. Most new builds have a rental rate which just covers maybe the interest on your mortgage and a few other costs, there isn’t really much there to make a profit so that is why a lot of people would find mortgage lenders who offer very low interest to get the ball rolling.As there has been a global recession in recent years, not many landlords are actually making very much money and at this moment in time the best kind of property to buy are run down terraced houses, these are the kind of houses students live in and the price you pay against the rent the tenants pay can be quite a decent difference. You have to remember though that old run down houses can come with a lot of problems so the amount you pay in repairs could mean you end up losing money.