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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk
Tel: 0345 345 6788
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Question
Can I make overpayments on my buy-to-let?
I am about to remortgage my buy-to-let property following a five-year deal. It’s due to end in March and I noticed house prices in the area have risen quite substantially since I bought the property so I’m pretty happy with how things are going.
I wondered, however, whether there was a mortgage which allowed me to make overpayments at occasional intervals? I earn a bonus through work which is paid in March and then again in September.
I like the idea of investing my hard-earned cash into my own property. Is this an option?
Answer
It’s great to see some positive comments about being a landlord – I’m glad you are seeing the benefits of your investment.
So, some buy-to-let deals allow overpayments, usually capped at 10% of the amount you owe in any one year.
However, depending on whether this 10% would be sufficient or not, there are some more flexible options on offer. If you speak to a broker, they will be able to go through these with you.
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Question
Remortgaging to create office space – advice needed
I own three rental properties and manage them myself. I have been very lucky to have excellent tenants and one family, which is renting a three-bedroom house I own, has asked if they can build an office in the garden so they can work from home.
I was a bit surprised at first, but the more I think about the idea, the more it makes sense. After all, it may increase the value of the home and help improve its rentability in future. Now I need to work out how to fund it.
I am four years into a five-year BTL mortgage, but wondered if I could remortgage now and add the cost of building an outdoor office to the new mortgage? Do you think this is allowed and are there any lenders who can help?
Answer
We had a garden office, and it was brilliant both in terms of adding space and increasing value, so I really do recommend them! I would first speak to your current lender and see if they can lend you the money.
If not, you should consider a second charge mortgage and maybe even a full remortgage. The latter option may incur costs to clear your current mortgage early. I would speak to a broker who will be able to cost out the various options available to you.
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Question
Helping my father with his buy-to-let
My father has developed Alzheimer’s and my sister and I are currently in the process of sifting through his finances. He owns a rental property which currently has tenants who seem really nice and the property is run by a management agent.
The buy-to-let mortgage on the property is due to expire this year, in the Spring, and I wondered whether you knew what might happen to it then? Can we remortgage on his behalf? He’s in a home at the moment and we are not sure he’ll be able to speak to lender himself. He has moments of lucidity but it’s not easy to predict when these might occur.
Answer
I am so sorry about your father – I am sure this is a very difficult time for you.
First of all, I would encourage you to speak to the current lender to see how they can assist you. I am guessing you have Power of Attorney and thus can act on your father’s behalf – if not, I would urge you to speak to a solicitor to arrange this.
If the current lender cannot assist, you can look into options of a remortgage, again, using the Power of Attorney. A reputable broker will be able to help with this.
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Question
How much should I put aside for fees?
I am not sure if you can help but I am looking at buying my first property to let to tenants this year. I have a 50% deposit and need a buy-to-let mortgage for the rest.
How much of the deposit should I put aside for fees and are there any other financials I need to consider? So far, I’ve thought about letting agent fees, solicitors’ costs and the second property stamp duty surcharge but I’m sure there are many others! Thanks so much.
Answer
Ok, so I would add some cash for contingency (e.g., covering rental voids and remedial work to the property). There is no real set amount here, but to my mind, three months’ worth of rent would be the base level.
In terms of the mortgage costs, the one you haven’t mentioned is the mortgage valuation fee. The cost of this varies depending on the property value, but a broker will be able to give you a reasonable estimate of how much this will be. Good luck!
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