Tips For Mortgages On A UK BTL Investment

If you are considering getting a buy to let mortgage for your BTL investment there are a few things you need to be aware of before you make a final decision.  Investing in property has long been one of the safest ways to build long-term wealth.  You buy a property, make your monthly mortgage payments, then rent it out to a tenant.  Ideally, you will be able to charge your tenant enough rent to cover not only the cost of the mortgage payments you are making but also enough to make a profit each month as well.  In this type of scenario, it isn’t the monthly profit that should be your primary goal.  Over time property generally increases in value.  So, while you are using someone else’s money to pay your mortgage off, your property is also increasing in value.  You can then decide to later sell your property off and enjoy a nice windfall, or you can continue to use it as a rental property forever and enjoy a steady source of income.

What Types Of Things Do You Need To Consider When Getting A Buy To Let Mortgage?

  • This kind of mortgage is generally considered to be a greater risk by banks since it won’t be your primary residence.  Since it won’t be your primary residence you will probably be more likely to default on this mortgage in the event that you run into money problems.
  • Because a buy to let mortgage is considered a bigger risk you will usually be required to put a bigger down payment down when getting one.
  • If you currently own your own home and you have a mortgage on it, it’s going to be more difficult for you to qualify for a buy to let mortgage.  It all comes down to debt to income ratio.  If you have a primary mortgage payment each month you need to demonstrate that you can afford to make both your current mortgage payment as well as your new one, even if you do not have a tenant.  The reason for this is simple, you can’t count on having a tenant all the time and even when you lack one you still have to make your monthly payment.
  • When getting a buy to let mortgage most lenders want the mortgage term to end by the time you are 70 years of age.  That means that if you are getting a standard 30-year mortgage you need to take it out by the time you turn 40.
  • Like other mortgages, you also need to have good credit to qualify.

A buy to let mortgage is a great way to invest in real estate and build long-term wealth.  It is a risk, but it’s not as big of a risk as many other types of investments because property has generally been considered one of the safest things to put your money into.  If you qualify for a buy to let mortgage and are good at managing your money, it can be a great opportunity for you.


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