If you are considering acquiring a property on buy to let mortgages,then it may prove highly lucrative to plan and prepare before you apply, or you may find yourself filling out lots of applications unsuccessfully and get credit scored lots of times. It is advisable not get credit searched or scored frequently or your mortgage and finance applications could be declined as too many searches show up like a red flag.
Searching around for the best deal can take a lot of time, as there are a lot of financial products on the market, and you will be looking to find the best investment deal covering on several different areas depending on your needs. For first time investors Buy To Let Mortgage and customers without a deposit,there are a few banks & brokers who may specialise in this area of lending. Find an independent broker who specialises in the specific type of mortgage you require, as different lenders offer different deals and target different areas of the market. The term of your loan will affect the deals available to you, as lenders make more money for every year you sign up, so the term of the mortgage will affect fixed or variable interest rates you are offered.
You could try your local branch where you bank if they offer commercial investment loans and borrowing. They will have a credit history for you and may be more flexible. If this is not an option, then the specialist lender route may be the way to go. Be aware that applying for all forms of credit lending (including business and investment loans)will usually involve all the people on the application form being credit scored each time you apply for a mortgage or loan, and if you apply, the application has an expiry date, after which the application will be re-scored, which means another search/score and of course does not guarantee further approval. It is advisable to avoid too many searches and scores. Lenders will usually require some of the investment of Buy To Let Mortgages to be covered buy the borrower, this tackles both the issue of potential negative equity, since the lender is not offering the full 100% Mortgage and therefore they are not carrying all of the risk should the loan go bad. Equally an investment by the borrower can be seen as a positive approach to the deal and responsibility toward the property. If your business was banking, consider what you would expect from a customer you may lend large amounts of money to as this will help you think carefully about your application.
It does well to remember that banks and lenders are businesses and their ultimate goal is return on their investment in buy to let mortgages investments and so the better looking the property investment and the more prepared the borrower towards the banks requirements, the more likely you will be successful. It is advisable to have a deposit as previously mentioned and ensure you other credit (cards, loans etc) are paid upto date and regularly on time, as this shows an ability to repay debts. If your credit is not perfect, you may be able to find a specialist broker who is able to provide this type of mortgage. If you find repayments are too high, then sometimes it pays to look at all the elements that make up the mortgage, the term can always be reduced or extended, the insurances can be bought from other lenders on some mortgages who may offer a cheaper deal and of course the deposit you offer. It may sound obvious, but consider paying off your mortgage as soon as possible as it can save you money on the interest paymments. These are calculated per annum so for example each year is another 5%. Choosing a fixed and variable rate will also affect your level of repayment and so this can also affect short term repayments. If the interest rate is low, it may be worth signing up for a fixed rate at that level for a few years. There are also banks that will offset any savings against your mortgage, so these are worth considering.