Buy to let mortgages, also known as BTLs, became really popular in the 90s and the first decade of the millenium because they seemed to give young people a chance to get on the property ladder while bringing in cash at the same time. However, has the tide turned for buy to let mortgages? Apparently it has. The trade body for mortgages in the UK is the Council of Mortgage Lenders and they recently found out that buy to let mortgages increased by 16% in 2011. Let’s find out whether they still work or whether you should consider another option for your future.
mortgage According to recent news, HSBC has earmarked at least £15bn worth of mortgage loans to UK customers in 2012. With such a massive amount that is going to be available from one of the biggest banks in the world, it is no surprise that mortgages are definitely on the radar. A chunk of this £15bn pot for mortgage loans will undoubtedly go to buy to let customers. The whole point of buy to let is that you put a deposit down on a house and renting it out to tenants.
Advantages: One of the advantages of buy to let mortgages is the fact that you can actually create a passive stream of income. What passive income is you are essentially making money while you sleep and if you have invested in a property to bring in some money, having a tenant in there is one of the best way to do it. Another advantage of getting a buy to let mortgage is it gives you the chance to get on the property ladder instead of waiting a long time to save plenty of cash reserves to buy a house outright.
Points to think about: Before you decide if a buy to let mortgage is for you, one thing you should do is think about what kind of mortgage lender you will be applying to. Look for a lender that has rates of paying back that you can afford in your current lifestyle. Don’t feel pressured to go with the same lender as your family and friends – when you are choosing buy to let mortgages, always choose the mortgage lender that suits you.