Some lenders have evolved mortgage schemes where you
can borrow upto 125% of the property valuation at normal
mortgage rates. This allows some borrowers to pay off
expensive credit, but care should be taken as you will
owe more than the property value and the mortgage will
be over a longer period than a personal loan.
There are many schemes nowadays to enable home owners
to buy a second property to let out. These are known
as Buy to Let Mortgages. Commonly a deposit of 25% is
required, and fees are generally charged. Buyers hope
that the rent will more than cover the mortgage and
they will obtain capital increases in the value of the
property as well. There are hundreds of Buy to Let schemes
and specific advice to a borrowers individual needs
should be sought.
Considerations are:
(i) What is the rental market like in the area?
(ii) Is there the liklihood of property price increases
in the area?
(iii) Can you pay the mortgage if there is not a tenant?
(iv) What is your tax position as rent is income and
it will be taxed after allowances for mortgage interest,
repairs etc.
There are worries about the oversupply of rented properties
in the UK and rents in many areas are falling.
However, for many Buy to Let rate is a good way of supplementing
income and providing a pension. 40% of buy to let mortgages
are for this purpose.
There are a wide range of Buy to Let mortgages on fixed
rates, variable rates and capped rates.
See Mortgage
News for house price and interest rate information.
YOUR
HOME MAY BE REPOSSESSED IF YOU DO NOT
KEEP UP REPAYMENTS ON YOUR MORTGAGE.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST
YOUR HOME
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