Buy to Let Mortgage, Colchester, Essex

What is a Buy to Let Mortgage?

Click here to download our factsheet on the risks of buy to let mortgages.

A buy to let mortgage is exactly as it sounds - a mortgage that allows you to buy a property in order to let if out to a tenant.

Given the recent problems with the stock markets, and the amazing rise in the property market, coupled with the lowest mortgage rates for 50 years, it is not surprising that people are buying property as an investment.

How does it work?
A buy to let property can therefore been seen by many as an investment. The principle is simple: buy a property, let it to a tenant, and this money should pay the mortgage, perhaps with a little left over each month.

What are the risks?
However, getting an appropriate loan is not so simple. First, you must be able to raise a significant deposit - typically 15% to 30% of the property value. Second, the rates on the buy to let mortgage may not be the most attractive on the market, although the market is competitive and there are many decent options available.

Investors should also consider the downsides. Will you be able to let the property (and if so, will you be able to let the property all year round)? Prudence dictates that in calculating whether you are able to afford a mortgage, you should see whether you would have enough income to support the second mortgage payments when you are unable to secure a tenant. Only thorough research of the local market can tell you whether this would be a sound investment.

You must also consider the added risks that go with having tenants in your property, and the associated costs that go with maintaining such properties (as well as the legal regulations and responsibilities that go along with it).

Naturally, this is a specialist area, and you should seek the advice of a financial adviser (such as Woodruff Financial Planning) before embarking on any venture. We will be able to search the market for you to obtain the best mortgage for your needs.

Click here to download our factsheet on the risks of buy to let mortgages.

Click here to get advice on a buy to let mortgage from an independent financial adviser in Colchester, Essex.

Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it.