Buy-to-Let Mortgages Explained

Buy-to-let mortgages are for landlords who buy property specifically to rent out. Buy-to-let mortgages are generally more expensive than normal mortgages, but they help you become a property investor. As with all investments, there are risks, so you shouldn’t take out a buy-to-let mortgage if you can’t afford to take that risk. If you are having buy-to-let mortgage problems, you face far less protection than with a residential mortgage. Therefore, you must proceed with caution.

Buy-to-Let Mortgage Problems: No Regulation

Most buy-to-let mortgages are interest-only, which means you don’t pay anything off the lump sum borrowed each month. However, at the end of the mortgage term, you repay the capital in full. Should you not be able to repay the full amount, you will encounter various buy-to-let mortgage problems, including the property potentially being repossessed by the lender or given to the LPA Receiver. Under this circumstance, you could lose all control over the properties. In contrast to obtaining a mortgage for a property you wish to reside in, buy-to-let lending is not regulated by the Financial Conduct Authority (FCA). This means it is not regulated. Therefore, you may face various buy-to-let problems as a result.

Buy-to-Let Mortgage Problems: Empty Properties

Unfortunately, as a buy-to-let landlord, you cannot assume your properties will always have tenants. Even in the most sought-after areas, gaps in tenancy are somewhat inevitable and should be planned for as a means of safety. There will almost certainly be voids when properties are unoccupied or perhaps rent isn’t paid. You may need a financial fallback to meet your mortgage payments. This is one of the typical buy-to-let mortgage problems landlords experience. Another one of the common buy-to-let mortgage problems is the cost of repairs. For example, a boiler may break down or drain systems may become blocked. Costs can accumulate, leading to various buy-to-let mortgage problems.

Buy-to-Let Mortgage Problems: Shortfall Sale

A common trap for landlords is assuming the sale of the property will repay the mortgage as well as leave a lump sum. As Immediate Bank Claims has been privy to repeatedly, this is sadly often not the case. Property prices can be as unpredictable as the British weather! If house prices fall, you may not be able to sell for as much as predicted or hoped. This could mean losing costs or even severe negative equity. This is one of the more drastic buy-to-let mortgage problems. If this occurs, as the property owner, you will be left responsible for any shortfall. As a result, landlords can pay hundreds of thousands of pounds out-of-pocket.

Buy-to-Let Mortgage Problems Specialists

At Immediate Bank Claims, we are industry specialists in buy-to-let mortgage problems. Not only this, we have unrivaled experience in lender negotiations. As a result of this niche specialization, we are able to release landlords from their buy-to-let mortgage problems. We offer a free one-hour consultation for property owners with buy-to-let mortgage problems. If you are experiencing buy-to-let mortgage problems and require the most expert assistance, speak to the market leaders now.

Call Head Office on 01216881811 or fill in the contact form to arrange a call back.


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