Investment Property Mortgage In The United Kingdom
Get the Right Investment Property Mortgage In The United Kingdom
Getting an investment property mortgage in the United Kingdom is not simply about going into a lender's office and signing on the dotted line. There is a lot of ground work that needs to be done before you get your investment property mortgage in the United Kingdom. This requires careful planning so that you end up with the right property, the best investment and the right mortgage.
The first step, before you seek an investment property mortgage, is to decide what you need to get from property investment. With some people the most important thing is an immediate boost in monthly income. For others, long term capital growth is more important. And for most serious investors, both factors are important when choosing a mortgage.
The second step to take before getting investment property mortgage in the United Kingdom is to research the market. This means finding out about the type of property that is popular in your chosen area and investigating what amenities exist locally that will help to increase the attraction of your chosen property. Schools, shops, restaurants and public transport are a few of the things that tenants will be looking for, so consider these before searching for an investment property mortgage in the United Kingdom.
In addition, before you obtain an investment property mortgage , it is worth finding out how the property will have to be furnished (if it is furnished at all) and what standard of fitting tenants will expect. This will very considerably depending on whether it is a student flat or an upmarket city centre property. Check out the condition of the property. Unless it is let-able, with a kitchen, bathroom, sound roof and windows, it may be difficult to get an investment property mortgage.
BTL Property Types
Another consideration before going for an investment property mortgage in the United Kingdom is whether you can find a lender to lend on the type of property you want to buy. Many lenders refuse to lend on holiday lets, student lets, low value property, flats above shops, studio flats and former local authority housing. Even if you can find a lender to lend on these, be aware of the implications for the deal.
Another important aspect of an investment property mortgage is the rental income. Usually this needs to cover around 125 per cent of the interest payments on your mortgage, so make sure that the figure that gives is a realistic rental for the market you are in. If not, you may have to shop around. There are several lenders who use different calculations and lower rental cover figures, some as low as 100 per cent.
The steps listed above are important for anyone who is interested in investment property. Deciding on what you need from an investment, the rent you need to achieve, the money you will have to spend on it and the location will help you to make the best of your investment property mortgage in the United Kingdom.
