If you are looking to buy a property to rent out, as a long term investment, then you will need to obtain a Buy to Let mortgage rather than a standard residential mortgage.
Buy to Let mortgages are normally seen as a higher risk by Lenders and therefore you will usually need a bigger deposit of between 20%-40% of the purchase price.
This is because, as a Landlord, you could encounter issues in collecting rent or the property may be empty for a period of time, which could affect your ability to pay the mortgage payments each month.
Lenders will typically need your rental income to be 25%-30% higher than the mortgage payment payable from you.
Because of the higher risk, Buy to Let mortgages usually involve higher fees and usually a higher rate of interest.
Most Buy to Let mortgages are offered on an interest only basis. This means you would only pay the interest due on the mortgage each month.
At the end of the mortgage term you would be required to repay the full balance of the mortgage. Therefore you would need to ensure you have made adequate financial arrangements in place to repay the original debt.
We offer high quality advice throughout the transaction allowing you to make informed decisions.
We can also offer advice on stamp duty implications. If you own another property already then you may be liable to pay the additional 3% stamp duty rate on top of the current stamp duty rate for any property worth over £40,000.00.
Contact our teams in your local branch for further legal advice on buying a buy to let property - Sheltons Solicitors have branches in Bulwell and Hucknall.
Residential Conveyancing - I would just like to thank you for the excellent support that you gave us & the way in which you kept us up to date was second to none. It has been a stress full time & you helped alleviate that.
Sheltons Solicitors is a trading name of Edward Hands & Lewis Limited, a company registered in England & Wales with company number 07001422 having its registered office at City Gate House, 11 St Margaret’s Street, Leicester, LE1 3EA. The directors are Jason Hathaway, Leanne Hathaway, Andrew Robinson, Paul Stubbs and Emma Fuller. We use the word “Partner” to refer to the most senior individuals at Edward Hands & Lewis Limited and its use in connection with the business of Edward Hands & Lewis Limited should not be construed as an indication that any individual carries on business in Partnership with any other individual within the meaning of the Partnership Act 1980, or that they are personally liable to you or any other party for any acts or omissions. Individuals named as Partners owe no personal obligations to you in either contract or tort, nor does the title “Partner” mean that they have any authority to bind the firm. We are authorised and regulated by the Solicitors Regulation Authority and our registered practice number is 533589. Our VAT No. is 114080418.