Commercial
finance Self
Build Mortgage Investment
home Property
Portfolio
Currently
in the UK this type of lending is not regulated by the
FSA. In recent years renting out a property or property
letting has become a very popular.
UK.
There are many factors for this, for example a high
number of students, large numbers of foreign immigrates,
the government selling off council houses and higher
divorce rates creating families to split. It should
be noted that a letting loan is taking on a business
and needs experience with knowledge to be handled correctly.
Many
lenders and banks now provide buy
to let and let to buy mortgages. A let to buy is
where your lender will allow you to rent out your old
residential property so that you may be able to move
to a new home which means they would retain two loans.
Buy
to let mortgages may be governed by the valuer's stated
rental valuation on the valuation report. Most lenders
may be looking at the monthly mortgage payments being
covered by the monthly rent by 125%. And generally the
highest loan to value will be 85% so the landlord will
be looking for a 15% deposit to put down. This is because
the lenders regards this type of mortgage as a higher
risk than residential lending.
Landlords
should beware of dead rent periods when they are looking
for tenants. And it is in the landlord's interest to
put in place an assured shorthold tenancy agreement
that is to be reviewed every six months. This may give
some protection to the landlord from none paying tenants.
Landlord's
may generally regarded their property as an investment
due to capital appreciation and hence often placed the
mortgage on an interest only mortgage.
