With higher interest rates to pay and a larger deposit required, taking out a buy to let mortgage is not a decision that should be taken lightly.
To make sure you get the best buy to let remortgage deal for you – and one that you can definitely afford – it is important to seek the help of an independent mortgage advisor.
A major difference with a buy to let mortgage is that they are not generally covered by the Financial Conduct Authority like residential mortgages.
The general purpose of buying a house to rent out is to make money and, as such, this is seen as a business deal.
With the safeguards diminished, taking expert mortgage advice is even more important.
Here’s why you need a buy to let mortgage if you rent out a property
To stay within the law and win the approval of your lender to let a property out it is necessary in all but exceptional circumstances to take out a buy to let mortgage.
With a residential mortgage in place you would need to seek the permission of your mortgage lender to rent out the property, which they can either grant or deny.
So, if you want to keep your current home as a rental investment while buying a different home to live in – or moving in with someone else – you will need a ‘buy to let’ or a ‘let to buy’ remortgage.
How to use a broker to find the best buy to let mortgage
When you decide to rent out a property seeking the help of a mortgage advisor will give you exclusive access to the best buy to let remortgage deals. Some lenders in the buy to let market won’t deal directly with the public, so you can only access them through a mortgage broker.
Making sure you have access to the best buy to let remortgage deals is especially important as the rates and fees can be higher than for residential mortgages. The deposit needed is also higher, generally being around 25 per cent, although this can be higher, or in some cases lower.
Rather than a buy to let remortgage being worked out on your salary it is based on the amount of monthly rental income expected from a property, called Rental Yield.
A mortgage advisor will help you to work out what you can afford and what the best buy to let remortgage deal is for the property that you want to rent out.
What buy to let mortgage criteria do lenders use to make decisions?
Getting approval for a buy to let remortgage is different to a standard mortgage and a mortgage advisor will be able to explain exactly what is needed.
Buy to let mortgages can be arranged on a capital & interest repayment or interest-only basis, so financial planning is important so you can be guided to the most suitable type of mortgage for your needs.
The fees to arrange a buy to let mortgage are also higher.
Taking out a buy to let remortgage is to some extent a risk, and you will need to have a contingency plan if you are unable to rent the property out for a period of time.
Make sure you know exactly what you can afford when buying a property to rent out – and to secure the best buy to let remortgage deal, always use a mortgage advisor.
For help finding the best buy to let remortgage deal for you get in touch with AMG Financial Solutions – Staffordshire on 01785 225983 or email firstname.lastname@example.org.