Buy-to-let mortgage UPDATE from our Resident Broker

News

Well no change again in this month’s bank base rate, and no surprise there. But one of the big questions at the moment is, are whether property prices are going up or going down? It seems almost pointless reporting it sometimes. Last week, Nationwide said prices were up 0.9% and this week Halifax reported price falls of 0.5%.

I'm not sure if anyone knows completely why the two indexes are different, however there is some definite common ground. The shared view is that even though we may not be quite at the bottom of the market, prices are more stable and that gives increased confidence that the worst may be over.

Landlord Insurance - best rates - professional discounts

Of course, if you are buying at the moment that may not necessarily be ideal news - but don’t shoot the messenger! I will always give it to you straight.

The second bit of news this week was from the Bank of England Credit Conditions Survey. They revealed that the supply of mortgage finance is slowly improving with lenders expecting to make credit more readily available over the next 3 months.

Residential Mortgages - why not use them?

Although buy to let mortgages are quite static at the moment, there’s definitely more life in the residential mortgage market. Rates and arrangement fees are considerably lower than buy to let and its certainly worth considering using this to your advantage, where possible.

Take an example where you have an residential property with a small mortgage. If you want to buy an investment property mortgage rather than simply going for a buy to let mortgage consider remortgaging your residential property (subject to status of course) and buying the other property for cash. If you can’t raise enough outright, at the very least you could raise more deposit money so you can get a lower loan to value buy to let mortgage, which often means you have more choice. You can also offset the interest on the residential mortgage against the income of the buy to let, so reducing a possible 40% tax exposure.

Residential mortgage rates start from below 4% and for remortgages you can secure a free valuation and legal fees package.

If you would like more details on how this strategy is currently working with many of our investors, then give us a call.

Buy to Let Product Update:

1. No rental income needed - based on provable earned income:

BM Solutions

Interest rate: 5.89%
LTV: 75%
Product Detail: 3 year fixed

Arrangement Fee: 2.5%
Early Redemption Penalties: 3% in first 3 years.

Our thoughts: If you can prove your income can cover your existing commitments and your new buy to let mortgage then you do not need to fit the usual 125% rental cover criteria.

2. 4.94% at 70% loan to value with 120% rental cover

Whiteaway Laidlaw Bank

Interest rate: 4.94%

LTV: 70%

Rental: 120% at pay rate.

Product Detail: 3 year fixed

Arrangement Fee: 2.5%

Early Redemption Penalties: 3% in first 3 years

Criteria – (are you ready for this!)

- Applicants must have minimum income of £40,000

- Maximum of 3 existing buy to let properties

- No new build (defined as houses built in the last 3 years, flats in the last 7)

- No city centre properties apart from London

- Must have impeccable credit score

Our thoughts: If you can get past the painful criteria this is a market leading rate. They also have 5 year product which again is fantastic.

Tip of the week – Caveat Emptor

There are always rumors about exclusive mortgage products on the market. You know the type of thing - only available to one broker (who also happens to have a hotmail address), won’t tell you who the lender is and it has a non refundable upfront fee.

Please be very wary of any upfront fees and promises of rates and criteria that seem too good to be true. Here at Resident Broker we are always transparent about what the lenders charges are and who the lender is – which, let’s face it, is how it should be. If we hear of any new product that will positively affect our clients (and we are always listening), we will let you know straight away in a rate alert email.

Website Update:

For those of you that haven’t been there for a while, remember our SpytoLet system is your unique 24/7 buy to let mortgage finder.

You can even see a demo and tutorial on YouTube

Call one of our advisors today for more information on any of these deals 01424 205 373 quoting Property Hawk for NO FEE advice

Good hunting!

Your Resident Broker

John

Free property management software, Free tenancy agreements