Finding the right buy to let remortgage
If you are paying over the odds for your buy to let mortgage you could save thousands of pounds with a buy to let remortgage. In this article we give some tips and advice, and look at the issues surrounding buy to let remortgages.
Basically, a buy to let remortgage is a mortgage used to buy a house or an apartment which you intend to rent out to tenants. However, it differs significantly from a standard UK mortgage, where the amount you can borrow is decided on how much you earn. With a buy to let remortgage or mortgage, the amount you can borrow will depend on the value of the home you plan to let and the estimated income the property will earn.
Most buy to let remortgage and mortgage lenders will let you borrow up to 85% of the value of the property, even if you have an existing mortgage or remortgage on your own home.
Most lenders will be happy to provide you with a buy to let mortgage or remortgage for any standard property as long as it is suitable for immediate letting.
If you already have a buy to let mortgage or remortgage you may be able to up your income significantly or reduce the term of your loan with a buy to let re mortgage.
If you have had your buy to let mortgage for a number of years, you will probably already be in a strong position before you remortgage as house prices and rental incomes have risen significantly. While there may be a temptation to sell up and enjoy your earnings, this is rarely a good idea. Capital Gains Tax and the cost of selling will eat into your profits significantly.
There is a high possibility that you can increase your profits and enjoy full ownership of your property sooner than expected if you find a good cheap buy to let remortgage. There are no shortage of options out there with most banks offering products and many competitive building society mortgages.
If you remortgage, you will almost certainly be able to find a better deal because of recent changes in the market. And you should attract a much lower interest rate because your remortgage will represent a much smaller percentage of the value of the property, and your rental income will be higher. For example, borrowing 50% of the total value of the property should be much cheaper than borrowing 80% of the total value.
However, if you really want to move forward you can use a buy to let remortgage to raise extra capital and invest in another rental property.
If you do decide to remortgate be sure to shop around and compare all interest rates and fees and charges, or consider broker remortgage advice.
Buy to let remortgages have become increasingly flexible in recent years and can help you boost your income significantly. We hope this advice helps you find the right buy to let remortgage for you. Capped rate mortgages or a buy to let remortgage are certainly worth considering when you are preparing to take out a new home loan. In the next article in our series, we will look at charging orders and their implications for UK borrowers.
