Where Are All The
Best Buy To Let Rates?

You've undoubtedly heard something about the best buy to let rates or something like it at some point.

Does this mean that you're buying the cheapest property available? Or does it mean you got a great interest rate on the loan?

In a word…no. That's like saying that there's only one way to invest in property.

The fact is it's different for every investor. You maybe offered a very attractive 4.1% tracker deal. The rental income stacks up and the lender accepts the type of property. Everything in the deal looks great. Until you come to resell the property quickly only to find out that there is a huge redemption penalty.

This doesn't look like a good deal for you. However, for someone who wants to buy and hold the property for many years, this would be a great deal.

There are many factors that go into each transaction. What may be a great deal for you could be a terrible deal for someone else. There is no standard criterion of a good deal.

What factors determine best buy to let rates or deals?

While there is no set formula, one should consider several things before purchasing that "deal of the century."

• Mortgage rate - While the rate is very important, don't let it be the deal-breaker. As you can see from the earlier example, it's not always the most important factor.

• Loan to value ratio - Make sure the requirements fit your budget. If you only have 10% of the purchase price, don't waste your time if 20% is required. Find the program that fits your needs.

• Repayment penalties - This is crucial if you want to resell quickly. If you're going to hold the property for a long term, this doesn't matter. If you sell quickly it could end up costing you thousands. Be willing to take a higher rate to avoid these unpleasant charges.

• Price or actual value - Even if you get a steep discount, don't be surprised if the buy to let lender bases the loan on that amount. Some will loan on the value, some on the price. Be sure of this before you get too far along.

• Fees - Every lender has fees and some of them may seem outrageous. If you see a fee that says “Banker retirement fund” you might want to get up and leave. Just use common sense and don't be afraid to ask questions.

• Rental Income - Even though you may make a killing on rent, the bank might not let you count all of it. It depends on the evaluation that the bank makes of how much your property can make.

• Conditional products - When you get a mortgage, sometimes there are add-ons. You may have to pay for something else through the lender like buildings insurance. As long as the rates are fair, don't worry about it. You can object to anything you don't like though.

• Repayment terms - There are many options available when repaying the mortgage. Do you want to pay interest only, capital payments, or a little of both? You could get a 25-year loan or just a short term. There are many different ways you could repay the loan and they should fit your individual needs.

• Age - Although it may seem unfair, the bank may require you to have the loan paid off by a certain age. Therefore, if you're already at the retirement age, this could definitely affect you. On the other end of the spectrum, you may be too young for some lenders.

• Property type - What kind of property is it? Is it commercial property or a student let? Is it a detached house? Many different factors go into how your bank loans money. Even the location of the property can affect the terms that you receive. At times it can seem confusing, but just make sure of the terms upfront.

• Regulation - Were you planning on renting the house to a relative? Were you actually going to stay there for a while? If so, you might have even more conditions to meet. The Financial Services Act will regulate the mortgage in this case. The lender you work with may not even want to touch these types of deals. Find out which lenders work with these scenarios. Don't wait until the end to figure this out.

  These are just a few of the criteria that you'll have to consider to get the best buy to let rates and deals.

  So how do you get the best buy to let rates?

  Well, I thought you'll never ask!

  After you've found the property that is right for you, make sure to find an experienced buy to let mortgage broker. You don't want some "wet behind the ears" broker to handle your case. Someone who knows the process and knows the right questions to ask is the best person to find. If you don't feel good about your broker handling your mortgage, look for another one.
  
  

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