Landlords and Mortgages

Landlords and Mortgages

Over the past few months there have been numerous news stories regarding the Bank of Ireland and how they have implemented massive interest rate increases for the majority of their tracker and variable mortgages. We have also heard that some landlords are starting to struggle when it comes to interest only mortgages, as many have failed to budget in order to pay back the loan once the interest only term is over. So here we look at the importance of mortgages for landlords and how to protect your business:

The Importance of Mortgages

For most landlords, investing in a new property means having to shop around for a mortgage, and the most important thing here is to make sure you get the right one for you. Obviously, you will need to let whoever you borrow the money from know that you are buying the property for let-to-buy purposes, as the mortgage for this will be different than from those for non-rental properties. If you get a good mortgage you will find that budgeting each month and still getting a good amount of income is easy, however if you rush into it you could find yourself struggling to make the repayments!

Finding the right Mortgage

There are a range of banks and building societies that offer a number of different mortgages, and while it may be tempting to plump for the first one that looks appealing this is generally a bad idea. Firstly, you could find out too late that if you shopped around you would have got a better deal, and secondly a mortgage you thought was great in the first place could have a number of charges and restrictions attached that could leave you paying more than you originally thought. The best thing to do is to shop around, and if you need some expert advice why not go online or buy a money advice magazine, that way you can find out which mortgage is right for you!

Mortgage Issues

The worst thing that can happen with your mortgage is that you miss a repayment, and as the economy is currently so fragile your bank will not take too kindly to you owing them money. If you do miss a repayment you will need to contact your bank straight away and will probably end up having to pay a fine. Another issue is that your bank starts implementing unfair policies such as the Bank of Ireland, which could leave you struggling with your business. If this happens there are a number of financial regulatory bodies you can contact as well as your landlord insurance provider for advice and help.

Having your mortgages under control is of the utmost importance for all landlords, as ultimately the amount you have to pay on each property’s mortgage will affect your bottom line. So make sure you do your research and get the best one for you!

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