Investing in property? Consider a buy-to-let mortgage.
How it works and who's eligible
A buy-to-let mortgage is a loan used by landlords to purchase a property that they will rent to tenants. Here's how it works and who can get one.
Stable income and wealth accumulation
With a buy-to-let mortgage, landlords benefit from a stable rental income and the potential for property value appreciation.
Covering the mortgage and making a profit
The rent paid by tenants is expected to cover the mortgage and provide a profit for the landlord. The loan is usually interest-only, with the landlord repaying the whole amount at the end of the mortgage term.
Income and credit requirements
Lenders view buy-to-let mortgages as higher risk, so requirements may be stricter. Landlords are expected to earn at least £25,000 a year and have good credit. The rent charged should cover the mortgage repayments.
Comparing mortgages and online calculators
Landlords can compare buy-to-let mortgages online using comparison websites or brokers. Many lenders also have online mortgage calculators to determine the required rent.
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