Buy-to-let - Opportunity Knocks by Michael Challiner
Rising interest rates may strike fear in the hearts of would-be first time buyers, but what about the buy-to-let enthusiasts? We have seen some significant changes in the way buy-to-let mortgages are being sold and there are some interesting and fresh products on the market.
Arranging a mortgage on property bought as buy-to-let is different from the usual individual and personal mortgage. It is the projected income likely to be achieved from the property which governs the amount of money lent on the project and not the income of the buyer.
When it comes to searching for the all important loan, in the past lenders have usually looked for an expected income of around 130% of rental cover. This means that if the expected income from a property is around £1300 per month, then they would be most comfortable if mortgage outgoings were set at around £1000. It leaves a safety margin for periods when the property may have become unoccupied, or possibly in need of repairs or updating. Mainly due to the fact that there is evidence that buy-to-let borrowers are generally reliable and mortgage arrears are less than on residential mortgages, many lenders have reduced the requirement and in fact some will lend as much as 100%. This makes it easier for buyers to get into the market, but makes it more difficult for them to meet their lender's rental cover demands.
The easing of restrictions when working out income versus outgoings can be seen here in offers from Bank of Ireland and Bristol & West Mortgages. Their rental cover is now reduced to 100% and worked out on fixed interest rates for three years and over. They also offer shorter term fixed rates (less than a year) and variable ones, again based on 100% rental cover, but caution is needed here as this makes financial planning more difficult. The maximum loan with these two lenders is 85%, up to £500,000. Abbey, BM Solutions and edeus are just three of the companies offering 85% mortgages, up to £1m. Their ceiling for lending per borrower is up to £2.5m and this is on a maximum of 15 properties. They have lowered their age limits down to 21.
As far as the landlord is concerned, many take the view that as long as the income from letting largely keeps up with the outgoings, even a small loss from time to time would not be too much of a disaster. This is taking into account the actual value of the property in view of the excellent rises we have seen in the past few years.
According to a recent report from one lender who specializes in the buy-to-let market, tenant demand overall is strong and many landlords are actively increasing their investment in this field. They see yields from rental holding firm or beginning to edge up over the next 12 months. They are confident that recent increases in interest rates point to more and more demand for rented accommodation. Back in the 1990's when things were not looking so good for home buyers and negative equity was the buzz-phrase, buy-to-let boomed. The period of growth at this time was the biggest ever recorded.
It looks like a rosy future for buy-to-let investors. Maybe it's time to think about it? An on-line broker will offer up-to-date unbiased advice and come up with the best deal around.
About the Author
Happy home insurance provides information on home insurance and mortgages to uk residents . Its sister site Brokers Online offers a huge resource of home insurance articles
Buy to Let
Other Important Links.
:: Xeon Mortgages...
All About Mortgages Mortgage Basics Mortgage And Loans Types Of Mortgages Tips For Best Deals Advise Jargon Buster Buy To Let Mortgages Mortgage Calculation Comparison Tools Mortgages is another term...
http://www.xeonmortgages.co.uk
Buy to Let Mortgages and Commercial Mortgages in the UK...
Buy to Let Mortgages and Commercial Mortgages: Choose from a range of buy to let and commercial mortgages and related services including property development finance and property insurance." meta name="keywords" content="buy to let,buy to let mortgages,buy to let mortgage uk,let to buy,commercial mortgages,commercial mortgage uk,house insurance,buy to let finance,buy to let investment" !-- This web site was designed, developed, hosted and maintained by Red Ant Design. Contact Red Ant for further information on web site design, content management systems, ecommerce solutions, intranet and extranet development, hosting and digital multimedia. -- meta http-equiv="Content-Style-Type" content="text css" meta http-equiv="reply-to" content="general@mortgagesforbusiness.co.uk" meta http-equiv="content-type" content="text html; charset=iso-8859-1" meta http-equiv="content-language" content="en" meta name="robots" content="All" meta name="revisit-after" content="10 d...
http://www.mortgagesforbusiness.co.uk
Buy to Let Mortgages and Let to Buy Mortgages from Mortgage Specialist...
Buy to Let and Let to Buy Mortgages from the Mortgage Specialist Online - find the latest deals for specialist mortgages,loans, buy to let mortgages, first time buyers, buy-to-let, CCJ's,(County Court Judgements), defaults, arrears, missed payments,bankrupt and Re-mortgage plans we also can supply credit cards, loans and may other financial products....
http://www.mortgage-specialist.co.uk
Buy to Let Mortgages property UK buy to let mortgage calculators....
Quote 4 mortgages offers Buy to Let Mortgages for property in the UK, buy to let mortgage calculators, mortgage finance information and the latest rates. Get online buy to let mortgage quotes....
http://www.Quote4mortgages.com
Buy To Let Mortgages UK...
Professional buy to let mortgage services for UK residents only....
http://www.com-buy-to-let-mortgages.co.uk
Landlords Source Centre - Legal Resources For Landlords...
Provide Legal Resources, Online Courses, Legal Forms, Books, Tenants Credit And Eviction Checks, Eviction And Collection Service, Advice To Landlords Throughout Canada, U.S.A, and Europe....
http://www.landlordsinfo.com
Life Insurance Free Quote...
Home Owner's Free Insurance Quote Business Free Insurance Quote Health Free Insurance Quote Life Free Insurance Quote Motorcycle Free Insurance Quote Term Life Free Insurance Quote Auto Free Insura...
http://www.life-insurance-free-quote.com
#
Information on adding your web site to our Link Directory
© Copyright
These web site links are listed as a convenience to our visitors.
If you use these links, we take no responsibility and give no
guarantees, warranties or representations, implied or otherwise,
for the content or accuracy of these third-party sites.
Home Page > bankindex > Buy to Let
Top of Page