Buy To Let Mortgages have become very popular recently with investors
using them as an alternative to the traditional personal pension. These
mortgages let you buy a property for the purpose of letting it
out.
If you are thinking of becoming an investor landlord or extending
your buy to let porfolio then we recommend you use our buy to let
quotation system to view interest rates and buy to let mortgage
products. Check to see if a 100% mortgage is available, calculate the
maximum available loan and also find comprehensive explanations of the
different mortgage products.
Buy to let mortgages carry a certain amount of risk and it
is adviseable to take advice before applying.
Click
here to
find out more or to use our buy to let automated quote comparison system.
A 100% mortgage can be taken out without a deposit and the loan will be for the
full value of the property.
Usually with this type of mortgage the borrower will need to
demonstrate that they can afford the repayments and also have had no
recent ccj's, defaults or any other recent black marks against their credit
history. However some mortgage companies do offer 100%
mortgages to applicants with a poor or adverse credit profile.
One of the characteristics of a 100% mortgage is the risk of negative
equity. If there is a dip in the property market shortly after the
purchase, then the value of the property becomes less than the debt. This
is referred to as negative equity and leaves the lender in a position where
they can make a loss. When negative equity arises with 100% mortgages, if
you stop making the payments and the mortgage company force a
sale or you want to sell the property then the current market value would
be less than the loan.
Because of the negative equity risk with a 100% mortgage, the
lender will typically charge a higher rate of interest on the loan than
for a mortgage where a deposit is paid. You may also be asked to pay a mortgage
indemnity premium with 100% mortgages.
100 per cent mortgages come in many different forms including
discounted, fixed, capped and variable rate. It is unusual to find buy to let
mortgages that cover 100 percent of the property value but there may be ways
around this if you do not have a deposit. To find out more, receive a no
obligation quote, or just ask an expert advisor questions then please click
here.