How to Use Mortgage to Invest


Investing in rented properties in the UK is in the ascendant and the average rate of return for rented properties is close to 6%. Even with the proper use of mortgage loans, the annual rate of return on invested capital can easily exceed 15%. If coupled with rising house prices, the yield of British real estate is very impressive, becoming the most favored of all types of investment products. It is precisely this main reason that more and more Chinese prefer to invest in rented houses, that is, they buy their houses in the UK and rent them out to local people or Chinese living in the UK or overseas students, and gradually pay off the mortgage payment through rental income Loans, a few years later earned a British white house.
With the British pound plummeting after the Brexit, the historically low exchange rate provides an excellent window for overseas investors. At current exchange rates, all types of real estate in the United Kingdom hit a 10% discount for domestic investors. Moreover, for investors, the purchase of loans in the UK can also choose only Interest (Interest Only) repayment. In other words, investors do not have to pay a penny again for the entire loan term (such as 25 years), and only need to repay interest on the loan. The principal can be the latest in the entire loan period and then repay, and you can sell the house first, then the bank principal!
1. Do a good job in market research
If you are investing in a UK property for the first time, you need to be aware that buying a home is the investment you are looking for. If you have friends who have experience in this area, asking them for help would be helpful.

2. Choose a region that has the potential to rise
Areas with upside potential do not mean the most expensive or the cheapest. The upside potential means that people are happy to live in this place, and willingness to live in comfort may be based on various reasons. Which area of ​​your city is particularly attractive? Is public transportation convenient? Is there any good school? Where do students want to live? These are the questions you need to ask yourself. Although it may sound simple, they are the key to success in buying a home for rent.

3. Be Careful
It’s best to come up with pen and paper before you look around, sit down and think about what you want to pay for the price and possible benefits of rent. Homebuyers generally think rent can cover 125% of the loan, and some loans now require a 25% deposit. The best buy a house loan has a very high management fee. Once you get the loan rate, you also need to consider whether the house will be left vacant. These are all issues that need to be considered when making loans.

4. mortgage loans than three
For investors in the UK, remember not to go directly to the bank for loans. Sounds obvious, but many people do that, which is why banks have so much to gain. Check the background of the lender first by going online, or ask the lender more information, which does not mean you have to listen to them. For domestic investors, bank of China London Branch also accepted investors’ domestic income to handle mortgage loans for British real estate, providing Chinese investors with services not provided by local British banks.

5. From the perspective of tenants empathy
The starting point to buy rental housing and purchase housing from different, so the emphasis is also different. Of course, if you are fortunate enough to lock in an area that is suitable for both renting and self-occupation, it would be great.


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