The way the property market is at the moment, ordinary residential homes are harder to sell and harder to buy. For the same reasons, buy to let mortgages are more in demand. However, if you don’t know what you’re doing, you can easily get your fingers burnt. If you are hoping to get into the buy to let market, your first step should be to look for buy to let mortgage advice.
So why should this help you get the best buy to let mortgage for you? The reason is that buy to let mortgage advice will look not just at the property you are thinking of buying, but at your overall financial situation and how this type of investment fits into it.
• Initially, getting the best buy to let mortgage deal will depend on how much you can raise as a deposit. The adviser will suggest that you should be able to provide a deposit of 15-20 per cent of the purchase price.
• Different lenders have different exclusions according to the type of property being lent on. The type of property can dictate the mortgage you can get, and many lenders have very specialised requirements. If you obtain buy to let mortgage advice from a specialist broker, it will help you make an informed decision and should prevent you from wasting time and money by approaching the wrong lender for your requirements.
• Good buy to let mortgage advice will look at your level of risk tolerance. No buy to let investment is entirely risk free, as there are so many factors outside your control, such as interest rates and market fluctuations. Unexpected rises in interest rates can have a major impact on your business and could potentially wipe out your profits. However, the type of area, the type of property and the type of target tenant you choose can all affect the level of risk. The adviser will discuss with you what type of mortgage – e.g. fixed rate or variable rate – will best suit the level of risk you are willing to take.
• Really good buy to let mortgage advice will also take into account your life situation and your personal aspirations. The adviser will discuss your target age for retirement, and whether you wish your investments to have paid out by then, or whether you want them to provide income in retirement. The adviser can also help you be clear about whether you are looking for an immediate cash flow, or whether you want investments that will pay off in the long term. This will influence your choice of mortgage, whether it’s an interest-only mortgage, a long-term repayment mortgage, etc.
It’s difficult to take an objective view of your own life. But looking at how your buy to let investment is going to fit in with your overall goals is a far better idea than just grabbing a buy to let mortgage because you have spotted a property that looks attractive. A good specialist broker can provide buy to let mortgage advice that will not only save you time and money, but enhance your life chances too.