Mortgages for the Landlord and Landlady

Author: Ajeet Khurana

Buying a house is a great long term investment. Everybody wants to invest in property because it is a good investment in one's long term future. Housing is a great business in today's world, especially within city limits. With everyone wanting to live in the city and pursue lucrative careers, finding a place to stay is a problem. As a result, it makes good business sense to exploit this opportunity to profit by letting out houses to city tenants. More and more property owners have woken up to the income generating potential of renting out property. Loan providers everywhere have also recognized this development in the real estate business. So they too have come forward with cheap mortgages to assist property owners who are buying the property to let it out.

Buy to let mortgages are among some of the most important advances in the world of personal finance. Given the fact that the "buy to let" markets are booming, financial institutions are beginning to understand the profitability of this. Buy to let mortgages, as the name suggests, are awarded to people who are buying property with the sole intention of letting it out. Thus, these mortgages cater to the needs of these investors.

Like the regular mortgages, these mortgages are subject to the usual rules. However, with regards to the principal amount and the interest rate that you might get, they will vary according to your rent expectations. Thus, make sure that you purchase the property in a good area and at a competitive price. The idea is that you should succeed in recovering your investment within a short span of time. Depending on your current income and your expected rent amount, you could procure about 85 percent of the cost price of the house. However, do remember that the greater the down payment that you make, the lower will be the interest amounts that you will end up paying.

Buy to let mortgages are secured loans and they expire after a long period of time. So do not rush to get that mortgage. Do your homework first. If repayment is going to be a long drawn process, you do not want to get landed with loans that will be too much of a drain on your income. Even if you are sure of recovering your money far before the term of the mortgage expires, there is no need to settle for costlier loans. The best mortgages can be found only if you are willing to study the markets. These days buy to let mortgages charge lower rates than ever before. Scour the market to find the best deals.

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