Is it the right time to invest in buy to let?
It’s hard to predict the future but we all still have to plan and make decisions, to save and invest.
If property investment fits with your financial plans then it is equally important to research the finance correctly.
Why consult a buy to let mortgage broker?
Of course, you want to find a mortgage offering a competitive rate of interest – the financial success of your buy to let business probably relies on it. But interest rates are not everything when you are looking for a mortgage. Many different lenders offer buy to let mortgages and their terms, criteria and product features and benefits vary from one provider to another – meaning it may be complicated finding and choosing the product that most suits your particular needs and circumstances.
It is those complications which may make it essential to consult a buy to let mortgage broker – especially if you are a new landlord, as it can often be difficult negotiating your way around the different buy to let products available.
Understanding your options
A qualified BTL mortgage broker will give you the information and explanations you need to make an informed decision.
For example, you are likely to be focusing on an interest-only mortgage – since that is the type most commonly offered to prospective landlords. But …
- what exactly is an interest only mortgage?
- how does any lender calculate the maximum mortgage advance you are likely to be offered?
- how much can you borrow? (Our easy to use calculator will give you some idea of how much you are likely to be able to borrow).
- Will I need to show payslips or sa302?
A London mortgage broker can help answer these and many other questions and will know just what any potential mortgage lender is looking for in its applicants.
Using an SPV company for property investment is increasingly popular and a broker will be very familiar with this and the lender’s requirements.
Greater choice of products
Buy to let mortgage brokers also have access to a greater choice of products than you are likely to find by going directly to the mortgage lenders yourself.
This is because most lenders reserve particular mortgage products which they make available to brokers only. Some mortgage lenders might be more interested in purpose-built flats than conversions, for example. Others might be willing to lend on properties of non-standard construction. And, some might continue to express an interest in lending to you even if you have a less than perfect credit rating.
If you are looking to purchase a multi unit freehold block (MUFB) then you will need a very specific type of mortgage and lender to match. Likewise for a multi-unit holiday let. Although these may sound like similar propositions, from the lenders view point they are very different and are treated as such.
As an investor you may want to buy a run down property, do it up and then keep it as a buy to let. The go to finance solution is normally a bridging loan. However, our brokers can put together a bridge to let mortgage package to help with that.
Your broker can therefore match you to the most appropriate lender and product for your given circumstances.
Save time and money
Trying to find a BTL mortgage on your own may be time-consuming, as well as potentially costly if you don’t choose the most appropriate deal for you. If you apply to a mortgage lender directly and your application is declined, this rejected application will show up on your credit file – potentially causing you even more issues and stress going forward.
Using a buy to let mortgage broker, the whole application process can save you time and money. The buy to let broker you choose will spend time getting to know your own unique particular needs and financial circumstances – so that these can be matched to suitable buy to let mortgage lenders. Not only will this lessen the chance of any declined application on your credit file, but your broker will aim to get you the most cost-attractive buy to let mortgage solution available.
In summary, thanks to the help of a buy to let mortgage broker, you are likely to get a cost-efficient mortgage that much more quickly – invaluable when you are eager to snap up an especially attractive property at a favourable price and for the long term success of your buy to let business.
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- About the Author
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Mark has worked in financial services since 1995, initially as a Financial Adviser and then a Compliance Officer.
He has been a Senior Holiday Let Mortgage specialist at Drake Mortgages since 2001. He is often quoted on lenders websites and can be found in the press, talking about holiday let and available finance.