Investing money in property has become more popular over the last decade, as the volatility of the stock market has meant that people have looked for different ways to make money.

But before you rush out to buy a second property, make sure you do your research first. It is essential that you choose an affordable property in the right location, which suits your target market.

Lenders use different criteria when offering a mortgage for a Buy to Let property. They require the monthly rental income to be 130% of mortgage payments along with a larger deposit. The percentage of deposit that lenders require can be anything from 15% to 30%.

Buy to Let mortgage products are more expensive than traditional mortgage products because of the higher risks involved, for instance periods when you can not get a tenant for the property. However there are several specialist mortgages on the market, so they are competitive for their field.

Lenders will use several different ways to work out how much they will lend you. They may use the traditional three and a half times salary plus half the rental income. Alternatively they may base the loan purely on the amount of income you expect to receive.

Some lenders may use the ‘deduction’ rule. They will lend, for instance, 3 times your salary, minus an estimated figure for the annual mortgage payments you are already paying on your main property, worked out at a pre-set interest rate.

For example:

You earn £30,000 a year and the outstanding mortgage balance on your home is £100,000. The lender may calculate your average annual mortgage contribution to be £8,000 – they will have a formula to work this figure out correctly. The estimated £8,000 will be deducted from you salary to leave £22,000. This is then multiplied by 3.5 to give a maximum mortgage value of £77,000.

One thing to remember when you are considering investing in Buy to Let property is that rental income may not rise in line with the Standard Variable Rate, so you must ensure that a buffer is built into the amount of rent that you charge.

These types of mortgages are available to non residents in the uk. The mortgage rate can change and it's advisable to keep an eye on them.