Finding alternative measures to earn an income is rapidly escalating. A few years back, no one would have known what the terms to-let-mortgage mean; much less, the terms to-let-remortgage. However, since the 1990s, this type of loan has gained a steady stream of subscribers who use it to establish their own business enterprise.

Recently, there is also a surge of lending companies being put up that specialize in this kind of service; and earlier established financial institutions are making policies to offer such a loan to a receptive market.

So what is to-let-mortgage? And what is a to-let-remortgage?

Simply put, a to-let-mortgage is a type of loan that uses a property as collateral, with every intention of using that collateral as a property-for-rent. Either the entire property is turned over to a 3rd party to-let (for rent); or the property is accorded to various tenants who let (rent) individual rooms, or floors (very similar to flats.) Very often, the owner of the property, and / or the person billed with the mortgage policy, does not even occupy the said space, but may act like or hire a landlord or landlady. Repayment of the mortgage is usually taken straight out from the rent that the tenant(s) give to the home owner.

To-let-remortgage, on the other hand, is another type of loan policy taken by the homeowner in order to pay off the initial to-let-mortgage. As a rule, this kind of mortgage has a higher loan subsidence and cannot be given a fixed rate repayment package by lending companies. It works very similar to any mortgage policy, and may be exchanged for new policies every few years.

When is the right time to buy a to-let-remortgage?

As many of you know, there are many instances when the value of properties suddenly plunges; and the marketing for home loans become extremely difficult. These changes in the country’s real estate market may be feasible reasons to find more affordable mortgages. But unless you can find a financial adviser who can alert you to such changes, it would be better to take small, tentative measures of your own. Here are a couple of guidelines as to when it is a good idea to subscribe to a home loan like to-let-mortgage and to-let-remortgage.

One: study your to-let-mortgage contract and find out when exactly the term ends. You should be able to get yourself a better deal before the previous loan matures so as not to pay for additional expenses. Nonetheless, it would be best if you could do substantial research on the various lending companies’ offers before the term end. Try not to plunge headlong into the first remortgage policy that comes your way.

Two: approach lending companies just after or as soon as you have done major renovations in the property, or installed home improvement measures. These will help increase the value of the property, which in turn, may help secure you a large loan amount.

Three: if you have just had a salary promotion or have just increased your tenants rent. Some lending companies will base the amount you can borrow on this formula: your current salary 3x + ½ rental income - annual remortgage payments. If you can time this perfectly, you are bound to get a better loan policy.