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100% Buy To Let Mortgage

In this article we look at the 100% buy to let mortgage. What is it and how you can go about getting one.

What Is A 100% Buy To Let Mortgage?

It is a mortgage loan which can be taken without a deposit for the full value of the property – 100%.

For prospective and existing landlords, one of the most significant decisions they should make is how to finance the purchase of their 100% buy to let property. To do this they need to have a mortgage. Now, here is a question: where is the property going to be let out commercially? Almost all mortgage companies will absolutely require a specific buy to let mortgage.

In general and common buy let mortgage, they tend to be slightly more expensive than any other residential loans. In addition to this, you will be expecting that you will also be required to have a deposit of around 15 to 25 per cent of the property value.

Buy To Let Mortgage Options On 100% Mortgages

There is a big question that landlords should face: Are landlords able to opt for an interest only or just have a capital repayment loan?

What is a repayment mortgage? It is actually a kind of mortgage that will allow your monthly payment go in two particular part of the loan: a part of the payment is going to pay for the interest of the loan and the other part is placed to pay the capital amount that you have borrowed for the purchase of the property. And at the end of the mortgage term, let‘s say for a period of 25 years, you will owe nothing from the company and be the 100% legal owner of the property.

The main benefit for this type of mortgage is that you are paying some of the original loan every month which is known as the capital, this will cause you to end up paying for a lesser interest for the following month.  This is because the amount of capital that you have borrowed is reduced each month; this is what the interest charge is calculated on. In addition to this, many mortgage institutions allow their customers to over pay which further reduces the overall amount you have to ay for their interest.

How An Interest Only Buy To Let Mortgage Works

With an Interest Only Mortgage, you are allowed to pay for the interest each month and nothing for the original loan. This basically means that your monthly bill is lesser than a repayment mortgage; however, at the end of the term you will owe the mortgage company the principal amount you have borrowed for the purchase of the property. This means that there is a need for you to plan ahead for having enough capital left at the end of the term. This will pay the capital off. This is commonly done by selling the property or by investing it elsewhere during the term of the mortgage. This should have the view to using the profits to pay off the mortgage capital.

If you need a 100% buy to let mortgage ensure you know the full terms and conditions and the repayment terms.