Bad Credit Mortgages Help

What exactly is a buy to let mortgage?  Buy to let mortgages are mortgages that are available in the UK in which a buyer can mortgage a property that is to be let to tenants or to make profit.  In the US, this is the equivalent to flipping houses for profit or for renting tenants.

When the financial meltdown happened a few years back, these were some of the first mortgages to go in the UK and in the US.  Buyers used to only have to put about 5 to 10% down to get the mortgage.  Now the mortgages are making a comeback and are getting easier to finance again.  When the financial crunch happened, investors were required to put almost 40% down on the property to finance it with a buy to let mortgage product.  Now things are getting better with the down payments ranging from 10 to 20% depending on the property size and value.

Why are these loans so popular in the UK?  This type of mortgage productt has become very popular in the UK over the last few years as house prices have increased rapidly . Another reason for their popularity is the tax advantages that are available to the UK  investors who use them. Rental income is considered the same as salary, and is therefore often taxed at 22% or even 40%. However, landlords can deduct costs from the taxable portion of their rental income, and these costs can include the interest portion of their buy to let mortgage repayments as well as maintenance costs on the property. This tax set-up has made buy to let investment mortgages more popular over the last couple of years.

As you can see, buy to let mortgages are a great advantage to the investors in the UK who want a tax break and who also want to turn some properties into some rental profit.  While the programs aren’t back in full force yet, they are slowly making a comeback.