Obtaining a buy to let mortgage has become a whole lot more difficult in the last twelve months. Whether you are an experienced buy-to-let investor or a newcomer to the business, you can’t have failed to notice this. So even if you hadn’t previously thought about going anywhere but your own bank for your mortgage, now may be the time to consider the idea of a buy to let mortgage broker.
Why? These mortgages are a lot more thin on the ground than they used to be. Your bank will only have an extremely limited number of products – its own – and you get no chance to compare different products to find which is the most suitable for you. Because you have no choice, you could find yourself getting highly unfavourable terms.
So how could a buy to let mortgage broker help you?
• The fact that there are fewer buy to let mortgages available overall, means that it’s even more important to be able to choose from all the products available across the market. A buy-to-let mortgage broker can scan the whole market, giving you much more chance of being able to find the best product available.
• Before applying for your buy to let mortgage, you must decide who is your target market that you want to let to – e.g. students, young professionals, families, etc. Letting to students can be quite an attractive option as this is something that will always be required whatever the state of the market. However, some lenders will not lend on student accommodation. Also you may be considering setting up a multi-let property – i.e. several units in one building – which can be quite profitable and quite suitable for the student market. Again, however, some lenders won’t allow this. A buy to let mortgage broker can search the market to find a lender who can fit in with your requirements.
• There are some perfectly good buy-to-let properties that don’t fit into the “standard” description – such as a flat over a shop or an ex-council property. These can be easier to find tenants for than, for instance, flats in big apartment blocks built specifically for the buy-to-let market. Yet some lenders won’t consider them. A buy-to-let mortgage broker can help you find a lender who is sufficiently flexible to see the potential in “non-standard” properties.
• What type of buy to let mortgage you go for depends on what type of investment you are interested in. If you are looking for longer-term capital gain, you will want to pay off your mortgage as soon as possible, so you will want a repayment mortgage. However if you are interested in immediate income, or plan to sell the property in the future, an interest-only mortgage would be preferable. However some lenders will only supply capital repayment mortgages. A good buy-to-let mortgage broker will discuss with you what your investment plans are before looking for an appropriate mortgage.
Some people have been put off the buy to let business because so many investors have come to grief in recent months. In most cases this has been the result of unwise and irresponsible borrowing and lending. In fact the rental market is buoyant because so many people need to rent at the moment. So don’t be put off – just find a good buy to let mortgage broker who can set you on the right business path.