Things to think about before getting a buy-to-let mortgage. Evaluate your choices to make a well-informed decision about whether it’s the right fit for you.
Before committing to a buy to let mortgage you need to make sure you are fully aware of the pros and cons. In this blog we will help you make an informed decision as to whether buy to let mortgage is the right decision for you:
The Benefits:
- Capital gain: It is known that the value of your property can go down as well as up, however property in the long term has served investors well with an increase in value.
- Income: Rental properties can often help provide an additional income. However, make sure you factor in any ongoing costs of the property and check the rental yield for the rate of return.
- Demand: There is currently a lack of affordable housing and the rental market is ever rising. Demand is currently high which is always a good call for investors in property.
The Risks:
- Increased Stamp Duty. At the time of writing this blog, its 3% additional for a second property in the UK which has been implemented since 2016.
- Rental Voids. There is always the risk when you buy a property to rent that there will be times when there is nobody in the property and you need to factor this into your budget.
- Non-payment of rent. There is also the risk and worry of a bad tenant. Not only is there the non-payment risk but also equally court costs if it gets that far.
- Drop-in value. The value of any property can go down and may even fall below what you originally paid.
We recommend you speak to one of our experts, before applying for a Buy To Let Mortgage. They can fully inform you of all the risks and benefits involved.
Contact us today for more information!
Disclaimer
UK Mortgage Centre Limited is an Appointed Representative of Refresh Mortgage Network Limited. Refresh Mortgage Network Limited is authorised and regulated by the Financial Conduct Authority. We are entered on the Financial Services Register under firm number 1019794.
As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments. The Financial Conduct Authority does not regulate some forms of buy-to-let mortgages.
The Financial Conduct Authority does not regulate will writing and taxation and trust advice.
You may be charged a fee for your advice. A typical fee is £495, which would be payable when you receive your mortgage offer. Your dedicated advisor will discuss this further on your free initial phone call.
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