Buy-to-Let Mortgages secrets.

New trends have started emerging in the mortgage industry whereby borrowers are not only interested in having a roof over their heads but are also interested in earning passive income over time.One important of these trends is Buy-to-let mortgages.

Buy-to-let mortgage is a mortgage employed by homeowners to borrow funds for buying a property with intention of letting it out to tenants. For regular mortgages, mortgage brokers work out the amount of funds a customer can borrow using their annual income as the basis.This is different for buy-to-let mortgages. Buy-to-let mortgages have become available in the United Kingdom in the late nineties.

Buy-to-let mortgages offer interest rate relatively similar to owner-occupied mortgages, but are usually higher and with a higher processing fee. Since lenders believe that a buy-to-let mortgage carries a much higher risk than a owner-occupied mortgage, this risk is reflected in the higher rates on offer and fees.

The last10 years in the UK witnessed huge increase in house prices. This has resulted in high patronage of the letting market as many families can't afford fund deposits required for a mortgage. This has made buy-to-let very popular with property investors.

The other reason for the success of buy-to-let is tax benefits .The income a homeowner generates from the rent of a buy-to-let property is treated as salary (22%, 40% or 50% tax depending on the bands). There are several costs investors can deduct from their tax bill. These include: interest on mortgage repayments and maintenance costs to mention just a few.

Buy-to-let has been tainted with names in the last 5 years. Many people claimed that buy-to-let is one of the key causes for the exploding house prices in the United Kingdom. A good example is London, where it has been estimated that more than 30% of the properties are bought with intention of renting them out to tenants.

How explorable, marketable and profitable is buy-to-let property to investors? remains a question that can be answered by the investors from their own perspective of the investment. Every buy-to-let is different, and the rules for buy-to-let success has not changed.Homeowners need to use a mortgage calculator to determine whether they can afford repayments,estimate building costs and rent, and ensure that they invest in an area with high demand for rental properties.

Consulting an expert such as mortgage advisor who understands buy-to-let will go a long way in making you succeed in the game of buy-to-let mortgage. The web has got plenty of resources and information such as buy to let information or buy-to-let guide for new landlords.

Lenders are strongly Competing for borrowers whose passion for investment lies in buy-to-let properties, so it is always good to do market survey and compare interest rates in order to use your negotiation skills to get the best mortgage rates.