Buy To Let remortgage

The UK Buy To Let remortgage market is currently very buoyant. If you were today searching for the best Buy To Let mortgage or Buy To Let remortgage you will find numerous mortgage companies competing for your business. Landlord’s are always looking out for the next best mortgage deal and will often switch their mortgage every few years.

If you carry out a cost analysis on a number of Buy To Let mortgages you will probably save 1000’s upon 1000’s of pounds by remortgaging your Buy To Let property every two to three years.

Remortgaging involves moving your current mortgage to either a new mortgage with your current mortgage company or switching to a new deal with a new mortgage company.

In today’s Buy To Let mortgage market you can refinance your Buy To Let property to save money. Even mortgage rates of only a few years ago are now much lower; mortgage lenders consider Buy To Let to be a safe bet in terms of lending. When Buy To Let first came on the scene over 10 years ago the rates payable on let properties were approximately 2% over bank base rate. Over the years the margin dropped with 2004 seeing a margin of around 0.7% over bank base rate. Today the margin is even lower now 0.24% over bank base. So if your mortgage is currently on a higher rate you could save substantial money by remortgaging now.

The news that the Bank of England base rate increased could give you a reason to remortgage your Buy To Let property to a fixed rate Buy To Let mortgage. Fixing your mortgage at today’s fixed rates could see you saving substantial interest on your mortgage repayments, especially if rates continue to rise.

Landlord’s can now remortgage to 90% of the property value. Buy To Let mortgage companies have slowly moved the maximum you can borrow from a conservative 75%. Only a few years ago we thought 80% Buy To Let mortgages were special, then it was 85% Buy To Let mortgages and now 90% Buy To Let mortgages. So today, you could remortgage your Buy To Let property to 90% and at the same time realise some of the recent house price capital appreciation. Buy another Buy To Let property?

Another recent Buy To Let mortgage trend is the current reduction in the amount of rent required to service the loan. Going back 10 years most lenders were looking for your anticipated rental income to exceed 50% of your mortgage interest payment. Rental requirements have fallen in recent years and today calculation figures include 150%, 130%, 125%, 115% and 100%. Today it might be possible to borrow more money because the rental requirement reductions.

Finding the right remortgage option

You will need to consider the advantages of each mortgage product in the context of cost, flexibility, security and quality of service.

The meaning of cost in this context is the cost associated with switching the mortgage i.e. Moving mortgage lenders will require some legal work and more often than not a mortgage valuation. Some Buy To Let re mortgage deals offer fee free remortgage packages but these products tend to have higher mortgage interest pay rates. You will need to have your Buy To Let mortgage broker carry out a mortgage comparison for you; this will ensure that you get given the best Buy To Let mortgage quotes. You need to consider whether you need a flexible Buy To Let mortgage. Flexible Buy To Let mortgages tend to have varying flexible features. You could have one with the ability to draw down any amount, at anytime as long as it’s within an agreed lending limit or one that has the ability to payback more or a one that combines any number of flexible features.

By considering security in this context you should be asking yourself ‘Do I need to arrange a Buy To Let fixed mortgage?’ Fixed Buy To Let remortgages offer the security of knowing how much you’ll be paying, so if you know your current tenant will stay sometime then you can budget to meet your monthly payments.

Landlords tend to overlook the lenders ability to look after their interests over the longer term. A Landlord will not hesitate to take his business elsewhere therefore if your mortgage company is not performing then be prepared to switch your Buy To Let mortgage.

Other mortgage options

Discount Buy To Let mortgages have been very popular, as they tend to allow the landlord to remortgage every 2 to 3 years and take advantage of continual low cost mortgages. The other apparent added benefit is the ability to base the rental requirement on a lower interest rate i.e. the discounted Buy To Let mortgage rate.

Today Capped rates are not currently very popular amongst landlords but this may change if bank rates continue to rise. With a capped rate the interest rate remains variable until it reaches a specified level.

Tracker mortgages linked to the Bank of England base rate are the most popular mortgage among Buy To Let borrowers. These mortgages tend to be offered for the lifetime of the mortgage therefore allowing landlords to project profitability. Our Best Buy To Let Remortgage deal has been a Lifetime Tracker Remortgage.

Steps to Buy To Let Remortgage Success:-

Summary of what you will be doing:

You will be switching your mortgage to a new mortgage product. The new mortgage product will be with your current mortgage lender or a new mortgage lender.

You can use your Remortgage to make your repayments cheaper for you. For example, if your current discounted rate has ended and you have reverted to the mortgage lenders Standard Variable rate then you may wish to remortgage to another discounted rate.

You can get your mortgage through a Buy To Let Mortgage Broker who will in turn place your business with a Bank or Building Society. The UK is very fortunate to have such a competitive mortgage market with a variety of mortgage lenders with a variety of competitive remortgage packages.

The mortgage lender will require a mortgage valuation to ensure the property value is sufficient for lending purposes. It will come as no surprise that even after short while property price fluctuations can warrant a new valuation. Some lenders have introduced AVM, an automatic type of valuation that averages house prices and applies a valuation to your house without the need for a valuer to visit the property.

You will need to complete an application form ensuring that all boxes are completed. Incomplete forms contribute significantly to delays in the remortgage process.

The Solicitor will be instructed to remortgage your property from the one lender to the other. Unless you have decide to take out a fee free Buy To Let remortgage package you will have to instruct your own Solicitor and incur his or her charge.

Don’t forget to check with your current mortgage lender to see if you will incur fees for ending your mortgage. Such fees can include early repayment charges, discharge and sealing fees.

Stamp duty will not apply on Buy To Let remortgages.