Compare Buy To Let Mortgage
Compare Buy To Let Mortgage
"Best Buy To Let Mortgage"... does that mean the cheapest? And isn't that the same as the lowest interest rate?
No! By coincidence it could be either of these, but the best buy to let mortgage is the one that meets all of your individual circumstances and needs.
There may be a very attractive 4.99% fixed rate scheme available. Loan to value fits, rental income is sufficient and the lender accepts the type of property you are purchasing. But if you intend to sell the property quite quickly (and not all investment properties are held long term) then the 5% early repayment charge will come as a nasty shock to you!
So what ingredients do you need to go into your Best buy to let mortgage?
There are many considerations and variations, but the following are the more common ones:
- Interest rate... Everybody wants the lowest rate rate, naturally, but as can be seen above this is not always a good thing.
- Early repayment Charges - otherwise known as redemption penalties - what are the penalties, and how long do they apply? For shorter term funding a tracker at a higher rate may be more suitable, or for longer term you may opt for a long tie-in period if that particular product allows a larger advance than the others.
- Loan to value - What is the maximum % of the property value the lender/product will allow? There's not much point in drooling over a scheme that allows 80% borrowing when you need to borrow more.
- Value or Price - You may be purchasing from a developer and obtaining a discount... but most of the lenders will base the advance on the lower price. Finding the lender who will allow 95% to 100% of the reduced price may be important to you.
- Rental income - This is a real minefield ! Lenders will apply a "stress test" calculating the maximum buy to let mortgage advance based on the rental income. It can become even more frustrating if (as most do) they rely purely on the valuers rental assessment. If you have a wonderful property, but a low rental yield this will restrict the size of the advance available to you, unless you know which lenders apply different criteria. It is even more frustrating if you have surplus rental income from some properties, but low rental on others, UNLESS you know which lenders will aggregate them.
- Fees - Most schemes have valuation fees and lenders arrangement fees. The latter is usually added to the advance, but not always. These fees can vary considerably; are you willing to pay a higher fee for a more appropriate product? For buy to let remortgaging, some products offer free valuation and legal services, and/or may not have a lender's arrangement fee. This may be just what you are looking for, but don't forget to weigh up the savings against the other considerations.
- Fees - Most schemes have valuation fees and lenders arrangement fees. The latter is usually added to the advance, but not always. These fees can vary considerably; are you willing to pay a higher fee for a more appropriate product? For buy to let remortgaging, some products offer free valuation and legal services, and/or may not have a lender's arrangement fee. This may be just what you are looking for, but don't forget to weigh up the savings against the other considerations.
- Conditional products - Some buy to let mortgage schemes require that you have other products bolted on, for instance the buildings insurance must be arranged through the lender as well. That is fine, provided the premiums are reasonable and the policy risk exceptions, and the initial claim "excess" are not restrictive (not much point in having a policy if its impossible to make a genuine claim against it).
- Repayment Method - Do you want interest only, or capital repayments - or a mix? Do you want a short terms or >25 years - or a mix? If interest only, do you want to link a repayment vehicle to it? Each lender has its own policy on this... some insist on repayment method, others allow genuine "interest only", whilst others want you to declare what repayment vehicle will eventually repay the loan.
- Term/Age - This may be very important if you are of more senior years (okay, getting old). Many lenders will expect the mortgage to be repaid when you are 70, or 75, even though it is self-financed from rental income. Conversely, a first time buyer or a younger person may find their bank will not fund an investment property for them.
- Type - Fixed, Tracker, variable, discounted, LIBOR linked .Fixed or discounted for 1 year, 2,3,5years, more ?... Phew, the variations are mindboggling. A crystal ball may be the next acquisition for your portfolio!
- Property - Semi-detached house, Ex Council flat, HMO, student lets, flat above shop, Six flats in one block - or 8 houses in a row, mixed residential and commercial, fully commercial... the list goes on. Is it in England , or Scotland , Wales or Northern Ireland ?Guess what, each lender has a preference. Some will look at all sorts of properties throughout United Kingdom , but many are very restrictive.
- Regulation - If any part of the property is to be used by the applicant or a relative, now or intended at any time in the future, the mortgage will be deemed to be "regulated" under the Financial Services Act". Many lenders will not consider these propositions. Do you know which ones will?
There are many more variations and considerations, some of which may not come to light until you are part way through an application process.
So, given the above variations (and a whole load more as well) and your own preferences and needs..AND dozens of lenders(some that you may not have heard of) with as many different sets of rules and criteria...
Who do you go to for the "BEST BUY TO LET MORTGAGE"?
You need to speak to an experienced, specialist buy to let broker. One who will ask the right questions at the right time. One who will consider all of the above and knows how to get the best from a single property - or a large portfolio - for the client.
If you need to finance any property investment you can call us today on 0845 6010153 or send us an email here or fill in our online application form and get fast pre-approval for your next investment. Which ever way you choose to contact us we will be happy to assist in any way we can. We specialise in Self Certification, Buy To Let and Adverse Credit mortgages and remortgages both residential and commercial. We offer the most competitive mortgage rates and insurances in the industry all backed up with our unique Guarantee.
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Make your Property Portfolio Work For YOU not YOUR LENDER Contact us Today for FREE Expert Advice!
PS. Whatever method of contact you choose you can rest assured that our expertise will be put to work on your behalf immediately. Our goal is to provide you with the right mortgage at the best rate whilst making the process of financing your next property as simple and stress free as possible!
