Posted on 5 November 2012 by Vicky
I own a Guest House approx £90,000 without mortgage. I want to buy an investment property to let. What would be the best way to finance the purchase? Many thanks if you can help.
The most common way to purchase investment property is with a Buy To Let mortgage. Typically most mainstream Buy To Let lenders look at lending on 75% of the purchase price (LTV), meaning you would need a 25% deposit. There are however, a few lenders who will go as far as 80% - 85%LTV, though naturally the criteria is a little stricter. One of the most important areas for a Buy To Let mortgage is the rental income to be received for the property. Lenders will require that the monthly rent covers over and above the mortgage payment, typically at 125% of either the pay rate or a notional rate that they choose.
If you would like to discuss your enquiry in more detail, please let me know and I'll put you in touch with one of our consultants.
More than mortgages, talk to me about:
Financial Protection | Investments | Personal and Corporate Pensions | Home Insurance
General Insurance | Valuations | Conveyancing | Wills | Home finders
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.