When the housing market crashed a couple of years ago, it took with it another type of property development. Since the mid 1990s, there was a special type of mortgage that banks have been willing to make, known as “buy to let mortgages”. These loans are for properties the buyer intends to rent out and the repayments are calculated based the projected rental earnings for the property rather than the wages and earning of the buyer. For a period of time, these loans lost popularity, and it was difficult to obtain one. Today, however, banks are again beginning to make buy to let loans and allowing property owners to take out a buy to let remortgage.
You can use a buy to let remortgage to refinance the original mortgage and benefit from more advantageous interest rates and payment guidelines, or to finance an additional property when someone is looking to expand their property ownership. Lenen doorlopend krediet is a Dutch article giving their opinion about his matter.
While being able to find a buy to let mortgage is not as simple as it use to be, there are still several lenders who are willing to give them if the credit score is high enough for that property owner. If the property is currently rented and the owner can show proof of the income it generates, that will make it easier to obtain the loan.
Repayment guidelines for buy to let remortgages can be designed so that the owner only has to pay the interest due each month, or as a complete repayment loan instead. It comes down to which terms work best for each property owner – and can vary from one owner, or one portfolio, to another.
Typically, the main consideration that banks take into account when deciding on a buy to let remortgage is the likelihood that the property can generate income that is more than or equal to 125 percent of the interest due montly on the loan. There’s a good chance that the loan will be approved if the answer is yes.
If you are able to use a buy to let remortgage to fund the purchase of other property, this can be a smart business decision. When you do that, the property that is already mortgaged stays as the only one at risk if there is any problem repayment of the loan. It’s also much more simple to deal with one loan payment monthly rather than worry about different payments for different properties.
The main benefit of obtaining a buy to let remortgage or remortgage is that the income derived from the property usually is enough to cover most of the payments. Depending on a person’s career, outside sources of revenue might not be enough to even start to cover the amount due on loans for any size of property.
Be prepared for the fact that finding a buy to let remortgage may end up taking some time and effort on your part as a property owner. However, making that effort is worthwhile if you want to refinance your current buy to let mortgage to be able to take advantage of a change in terms or finance a new purchase without risking the new property. It might be more simple to obtain a buy to let remortgage for a purchase than to acquire the first mortgage on the new property as well.
