Whether you have a desire to become a landlord or would like to invest your money in property, then a buy to let mortgage is something you will probably need to consider. Unless you have the money to buy a second property outright you will need some sort of mortgage loan from a mortgage lender. If you are planning on renting out this second property then you will need a buy to let mortgage.

There are some significant differences between a typical homeowner mortgage and a buy to let mortgage, the most obvious being that you cannot get a buy to let mortgage for house or flat that you are living in. It is also important to remember that most homeowner mortgages do not allow a property to be rented out if the homeowner does not live there, so if you are planning on renting out a house you do not live in then you will not be able to use a standard mortgage. It is also worth remembering that your buy to let mortgage options may be reduced if you do not already have your own residential property.

Another way in which a buy to let mortgage differs from a traditional mortgage is the terms on which the mortgage loan offer is based. With a buy to let mortgage, mortgage lenders will be looking at the potential rental income rather than the applicant’s income. Ideally the rental income needs to be 130% of the mortgage repayment. If rental income is not your main priority then an independent mortgage broker may be able to find you a buy to let mortgage that has more flexible terms.

Before you apply for a buy to let mortgage it is important that you do your research beforehand as the mortgage lender will need to know the potential rental income, you will also probably want to know the types of property that are popular in your chosen area so you know that your investment will be a good one.

In terms of the types of buy to let mortgage available, if you go to a mortgage broker you will find that you do still have a wide choice. Initially you need to decide if you want a repayment buy to let mortgage, where you pay off the interest of the mortgage loan and the original amount you need to borrow, so at the end of the mortgage term you will have paid off everything you owe the mortgage lender. Alternatively you could opt for an interest only buy to let mortgage which should keep your mortgage payments down, but at the end of the mortgage term you will have only paid off the interest on the mortgage loan and at the end of the mortgage term you will still owe the mortgage lender the original amount you borrowed.

Once you have decided whether you want a repayment buy to let mortgage or an interest only buy to let mortgage you will then have to decide on which specific mortgage will be right for you. A UK independent mortgage broker should be able to help you with this, talking you through your different mortgage options, for example a tracker mortgage, a fixed rate mortgage and so on. However, whichever type of mortgage you need you are likely to need a minimum of 15% deposit to get the best range of mortgage deals.