Flexible mortgages
Flexible Buy To Let Mortgages
Flexible mortgages have begun to pop up in the market for
non-conforming mortgages. Buy to let investor landlords
are one group of borrowers that are ideally positioned to
benefit from the flexible features that some mortgages offer.
Flexible buy to let mortgages are a very recent arrival
in UK, but it is becoming more and more common for buy to
let mortgages to offer certain flexible features such as
daily interest, overpayment and lump sum payments.
If, as it should do for most of the year, the rental income
exceeds the costs of running the property and servicing
the mortgage debt, then the surplus can be ploughed back
into the loan instead of being kept in a separate savings
account.
This then allows the investor to either gain full ownership
of the property more quickly by paying off the loan early,
or else release the equity at an earlier stage in order
to grow their property portfolio.
A couple of other features of flexible mortgages can be
very useful for the buy to let investor:
If rent is collected in weekly or fortnightly instalments,
then a flexible mortgage that allows payments to be made
to match the frequency allows the borrower to pay off the
capital more quickly, as they do not have to wait until
a full month's worth of rent is collected.
Given that void periods generally affect most properties
at some point each year, a mortgage that allows the borrower
to take a payment holiday can be useful in helping to get
through periods when a rental property is unoccupied.
