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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
Looking for a mortgage: Will I be eligible for the headline rate?
I’m doing some research into buy-to-let mortgages and have been looking online at price comparison sites. When rates are advertised by lenders are these the actual rates – a headline rate – which will apply or is this the lowest rate they will offer for this product?
Some look very attractive but I am wondering if, once I have been assessed, the rate applied to me may differ.
Answer
Lenders generally offer a set of products which are fixed and non-negotiable, so essentially you’re either eligible for the headline rate or not.
As buy-to-lets are quite complex in terms of eligibility, taking into account your own situation, as well as the property and the rental calculation, I would save yourself a bunch of time and hassle by asking a mortgage broker to look at options for you.
They can recommend the best rate you can access by looking at your situation and the property – so you won’t have any nasty surprises on the interest rate down the line.
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Question
Can we remortgage two properties at the same time?
My husband and I have two rental properties and we have buy-to-let mortgages on them both. They are both due, this year, to come up for remortgage. One is due in September and other in November.
We are worried, firstly, about rising interest rates and wondered whether there was any sense in fixing them both into a longer-term deal? But we also would value some advice on whether you think they could be remortgaged ‘together’ with the same lender and at the same time so we can make the admin easier going forward?
To summarise, can we get two five-year deals on two separate properties and also move the remortgage dates so we are refinancing the homes together?
If not, is there another way to do this to make it easier next time?
Answer
Your timing is perfect – rates are increasing rapidly at the moment (and will continue to do so throughout this year and into the next), so the sooner you book a new rate, the better.
In short, you can remortgage the two together with the same lender, and I would encourage you to fix in for at least five years, providing you have no plans to sell either property before this period ends.
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Question
Buy-to-let success: What next?
I purchased a buy-to-let property nearly 10 years ago and since then the prices have gone up so much that I believe I am in a position where I have made nearly £80! I am quite astounded by this as I originally made this purchase to provide a bit of income on the side, but I hadn’t really considered the capital benefits.
I would now like to invest in another property. Is there a way I can remortgage on my current property to release some of the cash to invest in Property Number Two?
Answer
Wow! What an amazing success story – well done you! Yes, absolutely. Landlords often raise money from one property to form a deposit to purchase another.
Generally speaking, you will be able to get a mortgage at 75% of the new value, possibly 80%, but the rates can be more expensive.
Interest rates are increasing rapidly at the moment, so if this is something you are serious about, I would encourage you to make a move on this ASAP to secure a lower rate. Good luck!
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Question
Remortgaging home to raise deposit for buy-to-let
My wife and I own our home outright having paid off the mortgage a couple of years ago. We are interested in entering the buy-to-let market and buying a home rent to tenants.
We understand we would need at least a 25% deposit to do this. We are keen to find out, therefore, whether we could remortgage our own home to raise the deposit?
Answer
In principle, you can absolutely do this. Releasing capital from your home is a very standard way of raising funds for a buy-to-let, but it will be subject to whether you meet the lenders’ requirements in terms of affordability based on your existing income.
It’s important to bear in mind that lenders will not factor in the income you will receive from the buy-to-let for this affordability check.
A good mortgage broker will be able to show you the art of the possible here, and show you how the finance on the buy-to-let looks to make sure it is viable for you.
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