A Buy to Let Remortgage
A But To Let Remortgage
Real estate has long been one of the best investment opportunities available. Many people have become very wealthy by investing in real estate and there is no reason why the average person can’t do it as well. One of the keys to becoming a successful real estate investor is to have several properties in your portfolio. Owning just one property limits the amount of money you can make and it also puts you at greater risk of real estate price fluctuations. A buy to let remortgage can be a useful way to help you get more than one property.
The most common way for the average real estate investor to get started is to buy residential properties and rent them out. In many ways this is the same as buying a property that you intend to live in yourself. There are however a few differences that need to be kept in mind. The biggest issue is that it is more difficult to qualify for a buy to let mortgage, they will have a higher expectation for your income and credit history. The other big issue is that a buy to let mortgage will require a larger down payment, usually 20%. This is obviously a major impediment to owning the large portfolio of properties that is required in order to be a successful investor. Fortunately a buy to let remortgage can help to alleviate this problem.
A remortgage is nothing more than taking out a new mortgage on your property, there are number of reasons that a homeowner would want to do this but for a real estate investor the reason is usually so they can buy more properties. Using a buy to let remortgage allows you to take the equity you have in your property and use that money as a down payment on a new property. This allows the investor to increase the holdings in his portfolio and gives him a better chance of success.
While a buy to let remortgage can be a valuable tool for increasing your property holdings it is not the ideal solution in every situation. You will need to factor in things like any penalties that may be assessed if you pay off the initial mortgage early as well as the fees involved in getting a remortgage. You will also want to factor in interest rates, if they have risen since you took out the initial mortgage you may have to remortgage at a higher rate, obviously this is not an ideal solution. It is often a good idea to talk to a broker how specializes in buy to let remortgages in order to make sure that it is a good idea in your situation and that you get a good deal.
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