How Do You Calculate A Buy To Let Mortgage?
Buy to let mortgages are generally reserved for savvy real estate speculators. The mortgage differs from a traditional mortgage in that the underwriter allows for projected rental income to be figured into the debt-to-income ratio before the loan is funded. Mostly, buy to let mortgages are used to purchase large, multi-unit rental properties. Understanding how to calculate these mortgages is important because investors must know what their monthly outgo will be. Collect your mortgage proposal paperwork. This will include the proposed amortization schedule (which tracks how much each monthly payment will be applied to principal and interest), the APR, the monthly payment, the principal loan amount, the term (length) and the discounted variable (the discount at which the mortgage rate is priced). You’ll need all this information to calculate the mortgage. Determine the amount of monthly rent you expect to garner from the property. You may not have all the leases from tenants yet (if, for
