A mortgage in the general sense refers to a loan that a borrower takes from a mortgage lender to meet a financial crunch. Buy to let mortgages differ slightly from this. Quite prevalent in UK, buy to let mortgages are special mortgages offered to investors for the purpose of buying a property to be rented out. A boom in the real estate industry has made many interested UK nationals to invest in this field to make long term earnings.
According to the UK laws of getting buy to let mortgages, there is no limit as far as the number of mortgages you can file for. You can actually take as many mortgages you want provided you have a sufficient earning to pay back all of it. Otherwise, there are risks of your property getting forfeited. However, to be on the safe side, it is better to opt for 2 to at least 5 mortgages. For this reason, it is wise to take the advices of a professional mortgage adviser. You can also opt for the services of a buy to let mortgage calculator. Services like this are provided by many mortgage companies. You can either visit one personally or search their website to find out what help they can offer you.
A second mortgage can be categorized under three heads. This includes an ordinary second mortgage, a home equity loan and a home equity line of credit. Of all, a home equity line of credit allows a borrower to make repayments according to his/ her convenience. It should, however, be kept in mind that this type of loan puts a limit on the first and second loans which stand at around 75% to 85%.
So, before working on your decision to get more than one mortgage on your property, weigh the positive points. Initially, more than one mortgage may look like a big burden, it reveals its benefits in the long run .
Second or third mortgages give you the opportunity to buy more property.
An added buy to let mortgage also exempts you from paying Private Mortgage Insurance (PMI).
It provides a safe means to get some added finance which can be utilised in the maintenance of the property.
Attractive interest rates with sufficient time period to repay the buy to let mortgage.
You are now aware of the benefits of more than one mortgage that you can easily avail. Still, to make the application procedure easy and safe, be sure to follow the guidelines.
• As a borrower, you can either choose the same lender from whom you have taken the first mortgage, or search for other mortgage lenders who can offer you the best buy to let mortgage deals.
• Study the terms carefully before finalizing the deal.
• Think about long term implications of the additional mortgage that you are taking. Don't be duped by a low interest period or any special offers. The rates can turn higher once the set period lapses.
• Consider the additional costs that might occur like revaluation survey, arrangement fees, etc.
• You can also get your buy to let mortgage calculated by a mortgage calculator to find out the exact amount that you can borrow as your additional mortgage loan.
Additional mortgages, therefore, pave your way to better finances and buying more property at reduced interests. Used effectively, they can get you nice profits over a prolonged period of time.
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Michael Hatfield offers advice on best buy to let mortgages and also provides mortgage advisers
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