There are many different types of mortgages out there, and it can be hard to keep track of which is which.
There’s lots of information out there for those who want to buy their first home to live in, but what if you’re not buying your first home to live in it? What if you’re buying your first home to rent it out?
If you’re a first-time buyer and you’re thinking about opting for a buy to let mortgage, then this post is for you.
Keep reading to learn more about buy to let mortgages, including the pros and cons of buying to let and how to apply for a buy to let mortgage.
What Does Buy To Let Mean?
If you plan on purchasing a property purely to let it out (rent it to tenants), then you’ll need to opt for a buy to let mortgage as opposed to regular mortgages.
A buy-to-let mortgage is a different type of mortgage – it’s a loan designed for landlords who are buying a property to let it out to tenants.
There are several differences between your typical mortgage and a buy-to-let mortgage, and there may be more that you may need to consider.
Being a landlord is essentially running your own business, so you should take care of it accordingly. If you invest your finances in properties, you tend to have more control over the process than investing in stocks, for example. It’s considered a low-risk long term investment and can be a great way of generating funds.
If you commit to being a landlord, you can even use rent payments as your sole income. You can earn a profit when you buy a home by collecting regular rent payments from tenants.
Pros And Cons Of Buying To Let
You also have the opportunity to sell the property further down the line. However, whether you make a profit or not depends on the state of the housing market and the condition of the property. If your previous tenants have caused damage to the property, then chances are, it will have decreased in value.
It’s considered a low-risk long term investment and can be a great way of generating funds. If you commit to being a landlord, you can even use rent payments as your sole income.
You can earn a profit when you buy a home by collecting regular rent payments from tenants. However, there’s always a small element of risk. For example, you may struggle to acquire rent payments from your tenants.
You will also need to factor in additional costs, such as insurance, stamp duty, and general wear and tear of the property. Depending on which insurance you have, you may not generate an income when the property is unoccupied.
Applying For A Buy To Let Home As A First Time Buyer
Buying your first home is an exciting process, regardless of whether you’re going to be living in the property or renting it out to tenants.
However, there is a lot to consider and process when applying for a buy-to-let mortgage. Thankfully, with the right advice and support, the process can be a lot easier. If you’re based in the North West and are considering buying to let, we can help you.
Be sure to do some research if you’re thinking about opting for a buy-to-let mortgage, so you can gain a further understanding of the potential outcomes. We’re here to give you all the buy-to-let advice you need at LTC Mortgages.
We can connect you with a wide range of lenders to find you the best rates, and find the right mortgage for you.
Lenders require all kinds of documents and information from you in order to secure your mortgage. As you’re buying to let the home out, the lender may request a higher deposit or expect you to increase the rental income.
We can help to streamline the process and provide other options where relevant. For example, if the deposit is too high, we may find another lender for you, or suggest that you opt for a guarantor mortgage or purchase the property in a joint arrangement.
Liam Coker is a highly skilled mortgage and protection specialist who delivers excellent customer service. His knowledge of the mortgage industry is key to finding the correct solution for people’s specific needs.