Mortgage and Refinancing Information Channel:
We would like to thank the local libraries, schools, and universities for recommending students to visit us when doing research on any of our information topics.
Buy to Let Mortgages
Finding the right buy to let mortgage is crucial to your success as a property investor. Unlike other forms of property investment, a lot of the capital you invest into a buy to let investment property is likely to be borrowed. Over the last few years, the buy to let mortgage market has boomed, with more and more lenders bringing out products making borrowing money to invest in this way even simpler than before. There are a number of different buy to let mortgage products available from fixed rates, discounted variable rates, base rate trackers to name a few. It is worth remembering that different products may be suitable for different investment properties.
However it is very important that you get the correct guidance with your finance. Questions that are worth considering when finding a suitable buy to let mortgage:
1. Do they have access to lots of different buy to let products in the market place?
2. Do they have the ability to create a long term investment property strategy for you?
3. Are they able to secure exclusive buy to let products?
4. Are they able to arrange buy to let mortgages within 10 working days?
Most lenders will offer a maximum loan of 85% requiring you to fund at least a 15% deposit. The buy to let mortgage industry is very competitive with new products being launched on a very regular basis.
Some brokers may charge a brokerage fee up to 2% to arrange the buy to let finance for you but don't let this put you off because if they do have the ability to secure exclusive buy to let products for you, it could be very beneficial to your cashflow as a landlord. Plus, if they are able to reach formal mortgage offer stage in a very short space of time, this could result in you being able to secure investment property at very competitive prices if you have the ability to tell the vendor that you can have the deal completed within a matter of a few weeks. Get a FREE on-line buy to let mortgage quote now and see how you can start your investment property portfolio.
Most lenders will offer a maximum loan of 85% against the investment property for sale requiring you to fund at least a 15% deposit. Some buy to let mortgage lenders may be in a position to offer more favourable rates if you have a higher deposit available. With the buy to let mortgage industry as hungry for the business as each other it is worth monitoring the market on a regular basis as new products are being launched on an almost daily basis. Always find out the best deals available at the time. Some investors may decide to retain their entire investment property portfolio with one lender, but it is important to realize that different products between different lenders can provide you with maximum flexibility and cashlow depending on how you structure your buy to let funding.
What If I don't have a Deposit?
If you are looking to invest in your first buy to let investment property but don't have at least a 15% deposit, then you may find that you could release some equity from your own residential property. Contact your current lender for more details or find out more if you don't have a deposit and see how you can start your investment property portfolio.
Once you have established that you are in a good financial position to start on your first buy to let purchase, then you will need to know what options are available to you.
Buy to Let Mortgage Types
Variable rate buy to let mortgages
This is the lender's own mortgage rate and one that is subject to change whenever the lender chooses which is at the same time of base rate changes. This means that if you are on a lenders standard variable rate buy to let mortgage product then your monthly repayments will increase or decrease accordingly although they very rarely pass on the full percentage reduction to the client. This type of product does also allow the lender to change the rate even if there is no change in the Bank of England base rate. So if you are looking for something a bit more palatable why not look at your other options.
Discount buy to let mortgages
For a set period, the lender offers a reduction on its SVR (standard variable rate). Let's say, it might offer a discount of 1.5 per cent over three years. However much the SVR (standard variable rate) increases or decreases during the discount period, you always pay a rate 1.5 per cent lower.
Stepped Discount buy to let mortgages
Its also worth considering stepped discount buy to let mortgages, where the level of the discount reduces after a set period. For example, you may be offered a 1.5 per cent discount for a year, followed by a 0.75% per cent discount for the second year.
Fixed-rate buy to let mortgages
Regardless of the (SVR) standard variable or changes in the base rate, this kind of buy to let mortgage offers a fixed interest rate for a set period. The monthly mortgage repayments will remain the same giving the property investor the knowledge of what their monthly outgoings will be for a set term.
Capped-rate buy to let mortgages
The capped-rate buy to let mortgage offers a limit as to how high the interest rate can go. The rate you pay can move up and down below that level but never go beyond it. Your payments would reduce if there were any base rate decreases.
Drop-lock buy to let mortgages
This is a feature that is incluced in some buy to let discounted mortgages. Initially you decide to opt for a discounted product but for a small fee you have the option to drop into one of that lender's fixed rate products. At which time you would then be bound by the terms of the new fixed rate product.
Tracker buy to let mortgages
Tracker products can be a good option for buy to let investors. Tracker products offer a margin over the base rate for certain periods of time. Some will offer a buy to let tracker product which tracks the base rate plus a margin for a few years whereas recently there are more products coming on the market where they will track the base rate for the life of the loan. Providing it is a low enough margin over the base rate and the base rate remains at a comfortable level, this can be particularly cost effective to a buy to let landlord as it can avoid the necessity for regular refinancing and the costs involved in the exercise.
Jennifer Tweed is the founder of buytolet4sale.com, one of the UK's first property portals dedicated to all types of investment property for sale and everything you should need for your sale and purchase. Learn more about buy to let.
MORE RESOURCES updated Sat. March / 06 / 2021
Today’s mortgage refinance rates mixed — one key rate drops while another rises | March 2, 2021 - Fox Business
Today’s mortgage refinance rates mixed — one key rate drops while another rises | March 2, 2021 Fox Business
Can refinancing a mortgage hurt my credit score? Fox Business
Today's mortgage refinance rates see little change as market holds steady | February 25, 2021 - Fox Business
Today's mortgage refinance rates see little change as market holds steady | February 25, 2021 Fox Business
Best cash-out refinance lenders in 2021 Bankrate.com
3 signs you should refinance your mortgage right now Fox Business
Mortgage Recast: How to Reamortize and Save Money Credible News
Today's mortgage and refinance rates: February 14, 2021 | Rates down Business Insider
What Is a Mortgage and How Does It Work? | Mortgage 101 The Mortgage Reports
What Are The Benefits Of Cash-Out Refinancing? Is It Worth It? The Mortgage Reports
Can Closing Costs Change On The Closing Disclosure? The Mortgage Reports
Can You Use A 203K Rehab Loan For An Investment Property? The Mortgage Reports
Top 5 mortgage refinance questions answered Fox Business
How to decide if you should refinance your mortgage Fox Business
Pros and cons of a cash-out mortgage refinance Fox Business
How to refinance your mortgage Fox Business
4 ways to maximize your mortgage refinance savings Fox Business
Mortgage refinance: Everything you need to know Fox Business
How do I get the most out of my mortgage refinance? Fox Business
Who's exempt from the new mortgage refinance fee? Fox Business
Mortgage refinance rates continue hitting record lows – here’s how to get the best deal now - Fox Business
Mortgage refinance rates continue hitting record lows – here’s how to get the best deal now Fox Business
Everything You Should Know About The New Mortgage Refinancing Fee That Goes Into Effect Dec. 1 - Forbes
Everything You Should Know About The New Mortgage Refinancing Fee That Goes Into Effect Dec. 1 Forbes
Mortgage refinance applications soar despite a new fee that increases the cost - Pittsburgh Post-Gazette
Mortgage refinance applications soar despite a new fee that increases the cost Pittsburgh Post-Gazette
What are the hidden costs of refinancing a mortgage? Fox Business
4 ways to get lower mortgage refinance rates Fox Business
The best mortgage refinance lenders of March 2021 Business Insider
Despite low mortgage interest rates, homeowners should research the caveats before reﬁnancing - Seattle Times
Despite low mortgage interest rates, homeowners should research the caveats before reﬁnancing Seattle Times
A record 19.4 million homeowners can now save big on a mortgage refinance, as rates hit another new low - CNBC
A record 19.4 million homeowners can now save big on a mortgage refinance, as rates hit another new low CNBC
5 reasons to refinance your mortgage right now HousingWire
Complete Checklist of Mortgage Refinancing Requirements Credible News
10 things to know before refinancing your mortgage Fox Business
Refinancing your mortgage? Don’t make this mistake Fox Business
3 Mortgage Refinance Strategies to Consider in 2021 The Motley Fool
How a mortgage refinance affects your net worth Fox Business
10 tips for getting the best mortgage refinance rate, from checking your credit report to choosing the right lender - Business Insider
10 tips for getting the best mortgage refinance rate, from checking your credit report to choosing the right lender Business Insider
Today’s mortgage refinance rates climb upward — though one key rate holds steady | October 23, 2020 - Fox Business
Today’s mortgage refinance rates climb upward — though one key rate holds steady | October 23, 2020 Fox Business
Jumbo Mortgage Refinance Rates for March 2021 NextAdvisor
How to refinance your mortgage without closing costs Fox Business
Today's mortgage refinance rates hold steady at unprecedented lows | October 16, 2020 - Fox Business