What to Consider for a Buy To Let Mortgage
When looking for buy to let mortgages, it is important to take into account a number of key factors to ensure that the deal you obtain is right for your property investment. Over the last few years, there have been a multitude of buy to let mortgage products that have been released by lenders to make investing in property easier.
In fact, it is the availability of such a variety of buy to let mortgages that has fuelled the Investment Property market further. So what are the key factors that you need to consider when looking for the best buy to let deal?.
Interest Rates - Firstly you need to look at the obvious factor of the interest rate on the deal you are being offered. Lenders will offer a selection of interest rates that will generally vary depending on whether the mortgage is fixed or a tracker deal. In a fixed rate mortgage, you are normally tied in to a deal for a few years whereas and the interest rate is fixed at normally a discount from the base rate. The catch is that if you wish to repay your mortgage before the fixed period expire, you are normally liable to pay a penalty, which is typically 5%.
A non tie in (variable) mortgage allows you to pay off your loan early, but will attract higher interest rates. The main point to consider when deciding between a fixed rate or a variable is to evaluate which way the interest rates are likely to be heading. If they are heading lower, then a variable rate will be the better choice.
Arrangement Fees – An arrangement fee is normally charged by a lender and added to the full loan value to be repaid as part of the installments. Enquire about the arrangement fee charges before you embark on a loan.
Valuation Fee – All lenders will charge a valuation fee, but this should not be a major deciding factor that determines whether you choose a product or not.
Before embarking on a decision to go ahead with a mortgage, it is advised that a reputable mortgage broker is used. Mortgage brokers have access to a wealth of information on the market and lenders so are a good source to help you select from a greater choice.