What Criteria Do I Need to Meet to Use a Buy to Let Mortgage?
To use a buy to let mortgage, you need to meet certain criteria.
The majority of mortgage lenders tend to only agree on a buy to let mortgage with people aged at least 25-years-old, and who earn a minimum of £25,000 a year.
You also should already own your own home before obtaining a buy to let mortgage.
Many mortgage lenders will also avoid agreements on a buy to let mortgage if the investor is purchasing an off-plan property.
While there are some obvious benefits of using a buy to let mortgage such as the freedom to buy an investment property without having the full amount of cash available, there are also some disadvantages.
Here are some of the ways in which paying upfront for your investment property can be easier than using a buy to let mortgage.
Buying Off-Plan Properties Is Easier Upfront
If you’re interested in buying an off-plan property, this can be a problem if you want to use a buy to let mortgage.
Because a lot of mortgage lenders tend to be wary of offering a buy to let mortgage for an off-plan investment, making an upfront payment is a lot easier.
The good news is that due to the below-market rates of off-plan developments, you won’t be spending much more on the full price of the property than you would on the deposit of a pricey investment!
A Buy to Let Mortgage Could Leave You Out of Pocket
Depending on the type of investment you make, the price of your property could fluctuate depending on market changes.
For instance, you could purchase a buy to let property using a buy to let mortgage and then need to sell the property due to unforeseen circumstances at a time when the market is performing at a low rate.
If property prices have fallen by the time you choose to opt-out of a buy to let mortgage, you will still be expected to pay off the initial cost of the property.
This means that even if your property has dropped from a value of £150,000 to £135,000, you’ll still need to make up the difference which will leave you out of pocket.