Mortgage For Investment Property
Top Tips On Getting Your First Mortgage For Investment Property!
Getting your first mortgage for investment property is very similar to getting a residential mortgage. In fact, when you get your first mortgage for investment property you might have to meet some of the same criteria as when you bought your own home. However, there are also some important differences between getting a residential mortgage and a BTL mortgage. Here are some of the aspects to consider when you are ready to get your first investment mortgage.
If you are new to property investment, lenders are going to want to be sure that you have thought through all the aspects of your first mortgage for investment property. Indeed, it makes sense for anyone getting a first mortgage for investment property to take plenty of advice before parting with any investment money.
Advice on BTL Mortgages
Advice on a first mortgage for investment property can come from a number of sources. It makes sense to find out about the area where you plan to invest. There are two ways to do this. One is to visit the area and become familiar with the amenities such as shopping, restaurants, schools and public transport. The second is to take advice from the professionals. This may well be a condition of your first investment mortgage.
When it comes to your first mortgage for investment property, some of the professionals to consult are letting agents who have their fingers on the pulse of the local market. They will know what type of property people are looking for, whether a particular property is likely to rent well and what you will have to do to a property to make it fit for rental. All of this information is invaluable when you are seeking a first mortgage for investment property.
When seeking a first investment mortgage it is also worth investigating mortgage lenders' criteria. These can be strict for new landlords. For example, some lenders will not lend to landlords who are under 25. Some lenders require new landlords to have jobs so that they can be sure they will be able to meet the payments on their first mortgage for investment property. Still others impose limits on the number of properties such a landlord can have and there are even some who will not give a first mortgage for investment property to a new landlord.
A key issue when it comes to an investment mortgage is rental cover. This is the amount by which the rental income exceeds the interest payment on the mortgage. Typically, this is set at around 125 per cent, though it may be 130 per cent. There are also lenders who will accept 100 per cent rental cover, though borrowers pay for this in the form of increased loading on the interest rate.
The best way to get a first mortgage for investment property is to be able to show that you have thought about location, rental income and how you will repay the mortgage. Lenders will also be looking for signs that you will be able to keep repaying the mortgage even if the property is vacant for some time. Thinking about these areas in advance will prepare you to get a first mortgage for investment property.
