Property investment mortgages are not too different from any other type of home loan. Like other loans you can choose fixed, variable or split interest rates. But there are two types of loans that tend to be more attractive to investors.
With most standard home loans your repayments combine the interest you owe on the principal amount you borrowed, plus a little bit of the that principal (capital amount borrowed) as well. In this way you slowly chip away at that original amount over the term of the loan.
With an interest only loan the principal remains the same. You only have to pay the original amount you borrowed at the end of the mortgage term or when you finally sell the investment property(whichever is the sooner)and hopefully make some capital gain.
This type of loan is useful for investors because:
With a Capital Repayment mortgage your monthly payments will be made up of interest, plus a small amount off the original capital borrowed.
If you already own a property, a line of credit is a way for you to tap into any equity you have built up in that property and, use it as a deposit for your investment property.
A line of credit loan allows you to draw from a fixed amount at any time to pay for whatever you want. It's kind of like a credit card with a big limit but the equity in your home acts as security for the loan.
Like when choosing any other home loan, you need to compare rates, features, fees and charges.Continue to information about tax and your investment property.
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Think carefully before securing other debts against your home.
Your home may be repossessed if you do not keep up repayments on your mortgage or other loans secured on it.
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Adverse Credit - The overall rate for comparison is 9.2% APR. The actual rate available will depend upon your circumstances. Ask for a Key Facts Illustration
Right to Buy Mortgages - The overall rate for comparison is 8.9% APR. The actual rate available will depend upon your circumstances. Ask for a Key Facts Illustration
CURRENCY MORTGAGES - CHANGES IN THE EXCHANGE RATE MAY INCREASE THE STERLING VALUE OF YOUR DEBT.
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