Mortgages > Best Buy to Let Mortgages

Best Buy to Let Mortgages

Are you looking for the best buy to let mortgages with the lowest rates payable? Need to calculate repayments on-line? Not sure how much you can borrow? These are all questions that you may well be asking yourself if you are looking for the best buy to let mortgages. Finding the right buy to let mortgage is crucial to your success as a property investor. Unlike other forms of investment, a lot of the money you put into a buy-to-let property is likely to be borrowed. Over the last few years, the buy to let mortgage market has boomed, and borrowing money to invest in this way has become easier than ever. There are a number of different buy to let mortgage products available from fixed rates, discounted variable rates, discounted rates and so on.

Different products may be suitable for different investment properties. Finding the cheapest buy to let mortgage may not always be the best option so there are a number of things to consider when deciding which buy to let mortgage is best. For example:-A lender may offer a very cheap buy to let mortgage product which may carry a very attractive rate for a short while, but look at the small print. If you are then tied in for an extended amount of time at a much higher rate, then you need to calculate whether or not this is the best buy to let mortgage for you in terms of your cashflow as a landlord.-A fixed rate with no extended tie would enable you to know exactly what your monthly repayments are so that you can calculate your profit/loss for that set fixed term.-A discounted variable rate can be very attractive when the base rate is in the favour of the landlord and buy to let investors. Monthly repayments will fluctuate according to the decrease/increase in the base rate or LIBOR rate.-Some of the best buy to let mortgage products may be discounted variable rate products that also offer the option of a droplock facility.

A droplock facility on a buy to let mortgage means that for a fee, you can decide to switch to a fixed rate with that same lender.How Do I Know How Much I can BorrowThis will depend on the lender and the buy to let mortgage products available as this can vary. Some lenders may set minimum salary levels whereas others may need verification that you are an experienced property investor. Others may not be concerned with the level of income providing that the rental income is sufficient. In general, most lenders will calculate the maximum borrowings based on either 125% or 130% cover. This 5% can make the difference as to whether you can borrow the full 85% or less.The rent that a landlord receives generally has to be either 1.25% or 1.3% more than the interest payment of the mortgage.

For example if you were looking to purchase a buy to let property at ?100,000 the maximum loan you could achieve is 85%. Assuming an interest rate of 5% this would make the interest only monthly repayment of ?355. Therefore the rental income that can be achieved must be ?443. This figure being 1.25% times the rental amount.To get an idea of how much the monthly repayments would be on a buy to let property you are considering then its worth trying an online buy to let mortgage calculator to work out the repayments immediately.However it is very important that you get the correct guidance with your finance. Questions that are worth considering when finding the best buy to let mortgage:1.

Do they have access to lots of different products in the market place?2. Do they have the ability to create a long term property development strategy for you?3. Are they able to secure Exclusive Products?4. Are they able to arrange mortgages within 10 working days?Most lenders will offer a maximum loan of 85% against a buy to let property requiring you to fund at least a 15% deposit. But this does depend on the rental income that can be achieved from the investment property.

The buy to let mortgage industry is very competitive with new products being launched on a very regular basis so it is worth keeping an eye on the best deals around. Some brokers may charge a brokerage fee up to 2% to arrange the finance for you but don't let this put you off because if they do have the ability to secure exclusive products for you, it could be very beneficial to your cashflow as a landlord. Plus, if they are able to reach formal mortgage offer stage in a very short space of time, this could result in you being able to secure property at very competitive prices if you have the ability to tell the vendor that you can have the deal completed within a matter of a few weeks.Buy to Let Mortgage TypesVariable rate buy to let mortgagesThis is the lender's own mortgage rate and one that is subject to change whenever the lender chooses which is at the same time of base rate changes. This means that if you are on a lenders standard variable rate buy to let mortgage product then your monthly repayments will increase or decrease accordingly although they very rarely pass on the full percentage reduction to the client. This type of product does also allow the lender to change the rate even if there is no change in the Bank of England base rate.

So if you are looking for something a bit more palatable why not look at your other options.Discount buy to let mortgages For a set period, the lender offers a reduction on its SVR (standard variable rate). Let's say, it might offer a discount of 1.5 per cent over three years. However much the SVR (standard variable rate) increases or decreases during the discount period, you always pay a rate 1.5 per cent lower. Stepped Discount buy to let mortgagesIts also worth considering stepped discount buy to let mortgages, where the level of the discount reduces after a set period. For example, you may be offered a 1.5 per cent discount for a year, followed by a 0.75% per cent discount for the second year.

Fixed-rate buy to let mortgagesRegardless of the (SVR) standard variable or changes in the base rate, this kind of buy to let mortgage offers a fixed interest rate for a set period. The monthly mortgage repayments will remain the same giving the property investor the knowledge of what their monthly outgoings will be for a set term. Capped-rate buy to let mortgages The capped-rate buy to let mortgage offers a limit as to how high the interest rate can go. The rate you pay can move up and down below that level but never go beyond it. Your payments would reduce if there were any base rate decreases.

Drop-lock buy to let mortgagesThis is a feature that is included in some buy to let discounted mortgages. Initially you decide to opt for a discounted product but for a small fee you have the option to drop into one of that lender's fixed rate products. At which time you would then be bound by the terms of the new fixed rate product. Tracker buy to let mortgages Tracker products can be a good option for buy to let investors. Tracker products offer a margin over the base rate for certain periods of time.

Some will offer a buy to let tracker product which tracks the base rate plus a margin for a few years whereas recently there are more products coming on the market where they will track the base rate for the life of the loan. Providing it is a low enough margin over the base rate and the base rate remains at a comfortable level, this can be particularly cost effective to a buy to let landlord as it can avoid the necessity for regular refinancing and the costs involved in the exercise.Why Not Learn more about buy to let and find out how you can start your buy to let property portfolio..

Jennifer Tweed is the founder of buytolet4sale.com, one of the UK's first property portals dedicated to all types of investment property for sale and everything you should need for your sale and purchase. Learn more about buy to let

Mortgages ? Get Fixed Up Before The Crash

They say trends will always come back around. What was fashionable in the 70s will always seem to pop up on the shelves 30
odd years later. Unfortunately, there are some trends we wish would never show their faces again ? the 1980's property crash for one. Yet there has been some warning that we may be heading for another one.

It has been recorded that house prices have been dropping drastically over the last three years. With the effects being disastrous, more and more people are finding themselves in negative equity.

The nightmare that happened during the 1980s seems to be resurfacing in the present day.

So what is negative equity? Negative equity is when the value of your house is less than your mortgage. Each month you will be paying interest on a loan that is more than the value of your house. This will make it impossible to sell, as you will owe the building society more money than what the house is worth.

The causes...

Mortgages ? Get Fixed Up Before The Crash

Mortgages > Mortgages ? Get Fixed Up Before The Crash

How to Compare Fixed Rate Mortgages and Adjustable Rate Mortgages

There are many types of mortgages, and the more you know about them before you start, the better. To compare one Adjustable Rate Mortgage with another or with a fixed-rate mortgage, you need to know about indexes, margins, discounts, caps, negative amortization, and convertibility. You need to consider the maximum amount your monthly payment could increase. Most important, you need to compare what might happen to your mortgage costs with your future ability to pay.FIXED RATE MORTGAGESIn a fixed-rate mortgage, your interest rate stays the same for the term of the mortgage. The main advantage of a fixed-rate mortgage is that you always know exactly how much your mortgage payment will be, and you can plan for it.Benefits and Advantages:- Low rates for the full term of your mortgage- Security of a fixed monthly payment for the life of you loan, regardless of fluctuations in interest rates- More stability may give you peace-of-mindDisadvantages- Higher initial monthly payments compared to...

How to Compare Fixed Rate Mortgages and Adjustable Rate Mortgages

Mortgages > How to Compare Fixed Rate Mortgages and Adjustable Rate Mortgages

Types of Mortgages

Here is a useful guide to the different types of mortgages that are available. A mortgage is a loan you take out to buy property. You can get a mortgage direct from the lender such as banks, building societies and specialist mortgage lenders. Your mortgage is probably the biggest loan you will ever take out, so it is important to get a mortgage that suits you. This will depend on your personal circumstances and your plans for the future.

Many mortgages have hidden drawbacks. Get independent advice before you choose a mortgage. There are two basic types of mortgage, interest-only and repayment. The option you choose is determined by the way you want to repay your loan. There is no hard and fast rule about which is better.

It is a matter of individual preference. Interest only An interest-only mortgage allows you to repay just the interest on your loan, but you have to take out an investment that will mature to pay off the outstanding amount. If your investment performs well...

Types of Mortgages

Mortgages > Types of Mortgages

Dallas Interest-Only Mortgages

You are buying the home of your dreams with an "interest-only mortgage!" You'll get a low mortgage payment, and you'll maximize your tax deduction, all on your current income! Everything seems to be going good. But have you actually understood the notion of interest-only mortgage and how it functions?

Well it may break your bubble but there is no such thing as an interest-only mortgage -
because eventually you'll have to pay the loan principal as well. In other words, with an interest-only mortgage loan, you pay only the interest on the mortgage in monthly payments for a fixed term. After the end of that term, typically five to seven years, you pay the balance in a lump sum, or start paying off the principal. Net net! What you're really getting is an interest-only payment method which can be combined with any type of conventional mortgage.

An Interest only mortgage can be an excellent option for some borrowers, who have a valid use for a lower...

Dallas Interest-Only Mortgages