| Author |
Message |
|
|
 Sam
Site Admin
Joined: 21 May 2005
Posts: 281
Location: CALIFORNIA
117.49 Dollars($)
|
 Posted: Tue Jun 08, 2004 11:29 pm Post subject: An Overview on Buy To Let Mortgage |
|
|
Buy-To-Let Mortgage is a kind of mortgage loan taken to purchase a property which will be offered as rent to tenants.
Various types of buy to let mortgages:
- Fixed rate buy to let mortgage.
- Variable rate buy to let mortgage.
- Capped rate buy to let mortgage.
- Minimum status buy to let mortgage.
- Self certified buy to let mortgage.
- Limited company buy to let mortgage.
- Non resident buy to let mortgage.
Features
- Buy-to-let mortgage can be a remortgage on the current property or a mortgage on the property to be offered for rent.
- Most lenders allow for loan amount up to 75% to 80% of the property value.
- Borrowers require making a minimum down payment of 20%-25% of the property value.
- The maximum amount of loan amount depends on the rental income of the borrower or his monthly income or a combination of both.
- In most cases lenders expect the rental income to be around 25% to 30% higher than the mortgage payments. The extra sum is used to make up for the period when there is no rent or to pay service charges, maintenance costs and other fees.
- These mortgages offer a slightly higher interest rate compared to that of other mortgages.
- The mortgage can be either interest-only or a repayment mortgage with monthly payments including both principal and interest. With the interest only option, the unpaid loan balance is to be paid at the end of the loan term. This can be done with the help of an endowment policy or personal pension plan.
Disadvantages
- A buy-to-let mortgage requires high monthly payments since the interest rate charged on these mortgages is higher than that of the others.
- There is no tax relief when payments are made following the interest only option.
|
|
|
J Browne
Guest
|
| Posted: Fri Oct 03, 2008 6:01 am Post subject: Tax Relief |
|
|
| Am I due any income tax relief on an interest-only, buy-to-let mortgage? |
|
|
Caron
Moderator
Joined: 19 Jul 2005
Posts: 1562
Location: florida
266.58 Dollars($)
|
| Posted: Fri Oct 10, 2008 5:36 am Post subject: |
|
|
Hi J Browne,
Welcome to our forums.
You can qualify for tax deduction on your interest-only buy-to-let mortgage if you have your name on the title and the loan as well as if you itemize your deductions.
Good luck
_________________
Mortgage Shopping made easy with booklet |
|
|
