A Buy to let mortgages for businesses is a loan for refinancing or buying a commercial land which is to let tenants rather than used by the borrower.  As it is classed as a business transaction, you have to pay heavily via fees and rates in comparison to a residential mortgage. You will also need a large deposit and at maximum, you can borrow about 85% of the commercial property,

Risk involved in this

Not a single property investment doesn’t come without its risks, but you also can’t just overlook this investment option as it is typically the most effective way to generate profit. The short-term type properly, investors rely on their monthly rental to repay their loan, so if a landlord is unable to find a suitable tenant (property left unoccupied), there is a chance he or she may not able to pay their mortgages regularly, meaning they can be repossessed.

A void period (when the property is vacant) does not only have the risk of repayment of mortgages, but also property maintenance, major repairs become a burden for the owner and, ultimately have a huge impact on an investor’s output from a property.

Criteria for borrowing a mortgage-

Unlike a residential mortgage which are simply calculated on the basis of the applicant’s gross salary, the buy to let mortgages criteria is little strict and stiff. The mortgage lender has to pay RTI over calculation, meaning the borrower has to prove that he or she can earn enough rental income via rent to cover the mortgage interest. The rental income usually should be between 125% and 135% of the monthly mortgage repayment to qualify for the loan.  As far as the age of the borrower is considered, for most Buy to let mortgages for businesses maximum age is 75 on the maturity of the mortgage, can be extended to 85 years as a special case.

Why consult a property broker?

Most of buy to let mortgages can only be obtained via property brokers, in most scenarios; you just can’t directly contact a mortgage lender. You have to carefully search to hire the best mortgage dealer, who is independent in order to avoid biased expert advice. By consulting a mortgage intermediate, you can access a new whole market of market options, and they can better recommend you the correct mortgage according to your financial condition.

Interest or repayment-

The decision to choose interest or repayment depends on wholly upon a borrower’s investment strategy. The repayment plan is best suited for investors, who want to earn a sum of money monthly for the property they own.

On the other hand, the interest route is more popular among property investors for the following reasons. One is that with an interest-only strategy helps to build a sizeable portfolio of property. Other is that the investors can manage cash flow to increase their number of properties.

Last, but not the least, you are the one, who is investing in a property, so, think and though to make your buy let mortgage for business a success.

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