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Buy to Let mortgage “Pros and Cons”
by Anonymous

August 20, 2004 -- Choosing a mortgage is one of the most important decisions you will ever make, so it’s important that you should get advice and guidance before going for a mortgage deal. Here is an effort to acquaint you regarding a type of mortgage commonly known as Buy to Let mortgage.

Buy to Let Mortgage is that type of mortgage, which is designed for people, who buy a property with the intention of letting it out. In recent years the popularity of buy to let mortgages has increased a lot, as investors look for alternatives to the stock market, and other methods of saving for their retirement.

This type of mortgage allows a borrower to purchase a property for purpose of renting it out to the tenants. It is a popular option for many property investors, as they don’t have to prove their income for the purchase and remortgage of the property. With buy to let mortgages lenders take into consideration, the income borrowers will receive from the rental payments, when assessing their ability to maintain the mortgage payments. Fixed and Capped rates are often available from lenders in this mortgage case, and there is a true self certification of earned income. The borrower gets the plus point as this mortgage also offers a lower ‘maximum loan to value ratio’. The borrower is free to remortgage his/her main residence to raise a capital.

Although there are many benefits of taking a buy to let mortgage, there are certain limitations also. It generally offers interest rates that are slightly higher. It also requires a larger lump sum as a deposit. A minimum of 20% or 25% of the property’s value is required as a deposit.
Borrower gets no facility for getting a tax relief, and sometimes he/she is also required to pay for an arrangement fee.

Conclusion: Despite the various limitations linked to buy to let mortgages, they are still very popular and are good investment technique for many investors.

If you have any other queries related to mortgage, feel free to visit this site http://www.mortgagekb.com

External Resources:
1. http://www.mortgagekb.com/down-payment.html
2. http://www.mortgagekb.com/escrow.html






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