Guide to Finance

Finding the very best buy to let mortgage which meets your requirements can be a time consuming task as there are so many products available. It can be a little daunting at first but once you get familiar with the deals and terminology you should find that it becomes easier with experience. But it really is worth spending time researching the mortgage market as discovering the right product will be crucial to your success as a property investor. Now here is a little advice: Make sure you have a buy to let mortgage calculator at hand when you are searching for the best deal. You can find such a calculator free online if you make a search query. This handy online tool will help you make immediate comparisons between the products on offer.

Buy To Let Investment

A property purchase is a very large investment. It doesn't matter if you are purchasing for your own use or whether you are buying to let out it is an investment which should be taken with extreme care and attention. Securing the best buy to let mortgage product can ensure that you maximise the profit on your property investment so the right advice and guidance is very important. When you have found the right buy to let deal - take action! Don't wait...make your move. To do this, you will need to have your funds in place so that you can clinch the deal before your competition moves in. This is a long-term investment and you need to take the same approach to investing money into a house or flat as you would to buying into the stock market.

Buy To Let Rate

Its true that Buy to let mortgage lenders will offer their best buy to let mortgage rates via buy to let mortgage brokers. The broker may charge a fee for their services. Don't be immediately put off by this as you may find that overall, the deal is better than a regular high street bank offer and the savings can be much more particularly if the broker has exclusive access to some of the best offers. Use an on-line buy to let quote system to compare mortgage products, rates and options. Firstly, it is obviously advantageous for you to secure a mortgage deal with interest rates set as low as possible. However, there may be other aspects to deals whcih may be more attractive to you even though the rates are not the best. In addition, depending upon your own forecast as to how the economy will perform over the coming years, you may think that it is a good idea to protect against further interest hikes by fixing your interest rate for a pre-determined number of years.

Buy To Let Lender

Lenders normally suggest that the rental income each month represents at least 130 per cent of the monthly mortgage payment. Lenders will calculate the absolute maximum buy to let mortgage laon based upon the potential income achieved from the property.

Buy To Let Products

Some mortgage brokers, may be able to source exclusive mortgage products and reach formal mortgage offer stage in less time than if you were to approach a mortgage lender directly. The most successful landlords will use some of the best buy to let mortgages to fund their buy to lets and with buy to let mortgage products becoming more sophisticated and competitive the right buy to let financing can ensure you maintain your investment property portfolios in such a way that you are always working to the most optimum cashflow situation. Bear in mind that the buy to let mortgage industry is very competitive with new products being launched on a very regular basis.

It really could be either of these, but the very best buy to let mortgage will be the one that suits your very own personal needs and circumstances.

100 Buy To Let Mortgages

The government predicts an increase of more than 2 million UK households over the next 10 years, due mainly to an increase in EU immigrants and a trend of smaller households. This obviously leaves a good opportunity for would be buy to let landlords, especially with the better buy to let rates we are currently experiencing and the extra tenants wanting accommodation.

So, what are the requirements of buying to let? Well, the main requirement of a buy to let mortgage is that the rent value of the property can cover costs of purchasing and maintaining the household. This can include mortgage payments, letting agency fees, building maintenance, building insurance, advertising, accountancy fees, management charges and any other associated costs. For example, licenses will be required for houses with more than 3 stories and more than 5 occupants. In fact, a general requirement is that rent covers 130% of the mortgage payments.

For example, a £100,000 mortgage will require potential rent of £520 per month. This is calculated from an £80,000 mortgage (after a £20,000 deposit payment) with an assumed rate of 6%. This example would command mortgage payments of £400 per month, so add your 30% to this and you come to the previously stated £520 rent. This appears to be a fair assessment when you consider the possible periods of time without tenants on top of all the previously mentioned house costs.

Fortunately for you, Council Tax is the responsibility of the tenants once they are occupying the house. However, you will be responsible for a percentage of the area rate if the house is unoccupied for more than 6 months. This will be a smaller percentage if the house is unfurnished.

Once paying tenants are in place, you will need to inform HM Customs and Excise of your new source of income. Expect a fine of £100 if you've not spoken to them within a month. Once you are making money from the house then taxes of 22 to 40% will be charged on any profit. Remember this is profit and not rent received so be sure to subtract mortgage payments that don't cover the part paying the principle (this does incur tax unfortunately), and other related outgoings from this amount.

So, with all this information at hand you have decided to go ahead and purchase your buy to let household. The next question is where to buy this house. Obviously, if you want to manage repairs and any other issues with the house yourself, it makes sense to purchase close to your home town. However, if you are using an agent then this isn't so important and you can buy in one of the more profitable areas.

According to UCB home loans (these are the buy to let division of the Nationwide building society), the better performing areas for property investment are Colchester, Rugby, Peterborough, Swansea, Belfast and Glasgow. Also worth noting is that East London, having been less desirable of late, is now making a comeback due to the current regeneration of the area (London having secured the 2012 Olympic games).

If you decide to sell the property, then capital gains tax (CGT) will be payable, assuming the value of your household has increased. You do have an annual allowance of £8,800 (couples can both claim this amount) and Taper relief which allows for inflation. Taper relief is a discount of 5% after the 1st 2 years and continues to be applicable up to year 10.

With buy to let mortgages on the market for as little as 5% and more specialist buy to let lenders around, this really is a good time to consider this investment. I would suggest you search the internet to find yourself a good broker and get all the information to hand if you decide to go ahead.

Related Articles
Author
Most Popular

•	100 Buy To Let Mortgage, by Elizabeth Grant
•	100 Buy To Let Mortgages, by James Grantworth
•	A Buy To Let Mortgage, by Chris Channing
•	Buy To Let Advice, by Parmdeep Vadesha
•	Buy To Let Mortgages, by Michael Sterios

About Author

Both James Grantworth & Michael Challiner are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

James Grantworth has sinced written about articles on various topics from Finances, Property Guide and Finances. James Grantworth is the Marketing Director for Let Mortgages Limited, a company specializing in Buy To Let Mortgages for the investor looking to build their portfolio qu. James Grantworth's top article generates over 165000 views. Bookmark James Grantworth to your Favourites.

Michael Challiner has sinced written about articles on various topics from Finances, Advertising Guide and Quit Smoking. Michael has worked in financial services at Director level since 1990. He now writes for a number of UK based financial web sites. Read the great articles avaiable on mortgage quotes Read the great articles avaiable on. Michael Challiner's top article generates over 165000 views. Bookmark Michael Challiner to your Favourites.

A Lot Of Happiness
You need to wear clean and washed clothes, change the upholstery of your house on a regular basis, maintain proper hygiene all the time and take good care of your skin