When it comes to buying a property to rent out there are always plenty of things to consider. One of the most important parts of the process is often the initial one; securing a Buy-to-Let mortgage.

That is why we have put together our guide on how to find, arrange and of course improve your chances of getting approved for this vital step on the landlord ladder!

Shopping around

Much like any other mortgage, it is important that you shop around to find the right deal for you.

There are a variety of different lenders out there and some of them will specialise in offering Buy-to-Let mortgages whilst some will not.

The important thing is that you are upfront and honest about your intentions with the property as if they discover that you are renting out a privately mortgaged property, you could find yourself in considerable trouble.

Applying

Once you have found the right lender for you it is time to start your application. Aside from the usual information that you need to supply for a mortgage application you will also be expected to advise your lender the amount of rent you intend to charge.

As a guide it is expected that rent will be around 25% more than the monthly repayment that you make on your mortgage. For example, if your mortgage payment is £500 per month then your rent will need to be set around the £625 mark.

Deposit

Buy-to-Let mortgages will often have higher deposit and fees when compared to a standard residential mortgage. The typical deposit that you will be expected to put forward is 25% of the asking price of the property.

Monthly repayments

We have already confirmed that Buy-to-Let mortgages have monthly repayments on them just like a standard mortgage; however there is one significant difference that is usually found between the two.

Residential mortgage repayments often include an amount to pay of the money that you have borrowed, alongside the interest that has accumulated.

In comparison, Buy-to-Let mortgages will ask that you pay the interest off alone. Leaving the borrowed amount for the property in its entirety.

It is important to remember if you choose to make interest repayments only as if you choose to sell  the property you will still need to pay off the mortgage amount in full.

Becoming a landlord for the first time needn’t be stressful; as long as you are aware of the finer points of obtaining a Buy-to-Let mortgage and what will be expected of you, you will soon be on your way to securing a great source of income. 

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