You too can get the best mortgage rates. Here's how...
The property world has significantly evolved in the last decade. The number of mortgage products on the market is less important than it used to be, 100% LTV mortgages have almost disappeared, and mortage lenders for most of them are becoming much more prudent. Gone are the days where lenders offer mortgages equal to 6 times your yearly income, and for customers with bad credits rating, having a mortgage has become hugely complicated. Despite the recession, you can still find some great mortgage rates on the market. Check out these seven top tips to help you grab the best mortgage rates:
1. Make sure you’ve got a large deposit: while 85% Loan to Value mortgages can still be offered by a few mortgage lenders, the top mortgage rates are typically offered on less than 80% LTV deals. Try to you save as much as you can afford for your initial deposit.
2. Important initial deposits go a long way for remortgages as well: because of the fall in house prices, you could well realise that the LTV for your house is greater than when you started your original mortgage. A possibility would be to utilise the money in your savings towards a greater deposit in order to grab a more interesting deal.
3. Know about your credit record: the mortgage applicants most affected by the credit crunch are mortgage applicants with bad credit, also known as “sub prime”. If you’ve got poor credit, the rates available to you could be much higher as the lenders attempt to guard themselves against the risk of lending funds to a client with a bad credit record. Make sure you know your credit record and take measures to bring it back on the right track.
4. Speak to a independent advisor: If you have got an unusual situation, e.g. if you are self-employed, it’s really important that you speak to a mortgage adviser. A goodindependent advisor will speak with you to find out about your personal circumstances and recommend the top mortgages available for your situation.
5. Select fixed rate mortgages if you would like to have security: fixed rate products ensure that your monthly repayments will stay fixed and will not go up or down with fluctuations in the Bank of England base rate. This safety does not come free though, as fixed rate deals are normally less competitive than variable rate products.
6. Go for a tracker mortgage deal for the top rates: tracker rates vary with the BoE base interest rate. The mortgage interest rates available for tracker deals are usually lower compared to fixed rate mortgages. There is always the possibility though that the BoE interest rate could increase and cause higher repayments if you select a tracker mortgage product.
7. Be aware of the arrangement fees: the top mortgage deals sometimes come with high arrangement fees. It’s important that you use for comparison the overall cost of your mortgage over the entire term, taking the arrangement fees into account, to understand what is the best mortgage deal for your circumstances.
1. Make sure you’ve got a large deposit: while 85% Loan to Value mortgages can still be offered by a few mortgage lenders, the top mortgage rates are typically offered on less than 80% LTV deals. Try to you save as much as you can afford for your initial deposit.
2. Important initial deposits go a long way for remortgages as well: because of the fall in house prices, you could well realise that the LTV for your house is greater than when you started your original mortgage. A possibility would be to utilise the money in your savings towards a greater deposit in order to grab a more interesting deal.
3. Know about your credit record: the mortgage applicants most affected by the credit crunch are mortgage applicants with bad credit, also known as “sub prime”. If you’ve got poor credit, the rates available to you could be much higher as the lenders attempt to guard themselves against the risk of lending funds to a client with a bad credit record. Make sure you know your credit record and take measures to bring it back on the right track.
4. Speak to a independent advisor: If you have got an unusual situation, e.g. if you are self-employed, it’s really important that you speak to a mortgage adviser. A goodindependent advisor will speak with you to find out about your personal circumstances and recommend the top mortgages available for your situation.
5. Select fixed rate mortgages if you would like to have security: fixed rate products ensure that your monthly repayments will stay fixed and will not go up or down with fluctuations in the Bank of England base rate. This safety does not come free though, as fixed rate deals are normally less competitive than variable rate products.
6. Go for a tracker mortgage deal for the top rates: tracker rates vary with the BoE base interest rate. The mortgage interest rates available for tracker deals are usually lower compared to fixed rate mortgages. There is always the possibility though that the BoE interest rate could increase and cause higher repayments if you select a tracker mortgage product.
7. Be aware of the arrangement fees: the top mortgage deals sometimes come with high arrangement fees. It’s important that you use for comparison the overall cost of your mortgage over the entire term, taking the arrangement fees into account, to understand what is the best mortgage deal for your circumstances.
Buy to let mortgages: let's get started
Buy-to-let mortgages have become available in the United Kingdom in the late nineties. A buy-to-let mortgage is a product that allows property investors to borrow funds to be used to a property with a view to rent it to tenants.
In general mortgage rates offered for buy-to-let mortgages are relatively similar to regular mortgages, but are usually higher and with higher fees. lenders believe that a buy-to-let investment carries a much higher risk compared to a owner-occupied mortgage. This risk is reflected in the rates on offer and the arrangement fees.
Tax benefits is a contributing factor to the success of buy-to-let mortgages. The income an investor earns from the rent of a buy-to-let property is taxed in the same way as salary (22%, 40% tax depending on the various bands). There are however multiple costs landlords can deduct from their tax bill: interest on mortgage repayments and maintenance costs for example.
Here's a couple of good tips for buy to let mortgages:
1. Do your research
Do you really understand what a buy to let is? The risks involved, the rewards, the likely returns? You need to do your research first. The web has got many resources including buy to let guides and buy to let information sites.
Do you know any buy-to-let investors? Speak to them. Ask them about the difficulties they’ve had to face, the errors they’ve made.
Do not forget that a buy to let may not be the best investment for you. Have you considered investing your money in shares or maybe in a high rate saving account? Buy to let mortgage rates may be low at the moment, but there is a risk that house prices might drop in the forthcoming years. Is this something you fully realise?
2. Select the right town
The “right” town has got nothing to do with price. The “right” region is a an area where people want to live, and therefore rent your property. Think about your town. Where do students live? Where are the top schools? Where are the transport links?
3. Compare the market
Do not go to the first bank you see and ask for a mortgage. Shop around, and consider using a broker that specialises in buy to let mortgages. Try specialist sites such as buy to let mortgages or compare the market mortgages to find a local adviser. It costs nothing to ask for information.
4. Do not limit yourself to your local area
Buy to let landlords typically invest in properties in their local area. Bear in mind that your town may not be the best place to invest. The advantage of a local buy to let property is that you can manage it yourself, but don’t forget that you can use the services of an agent to do that for you in you decide to invest further away from your area.
Is there a town near you that has got commuting links, or an university? This might be a better option for your buy to let investment.
5. Understand how much you would like to be involved
Buying a new property is just a start. In order to rent out a property, somebody has to organise the advertising, the viewings, and when the new tenants are in, be able to deal with repairs. If it’s something you are willing to do yourself, you can use the services of an agent that will do that for you. It is worth contacting several agents to compare what is on offer.
In general mortgage rates offered for buy-to-let mortgages are relatively similar to regular mortgages, but are usually higher and with higher fees. lenders believe that a buy-to-let investment carries a much higher risk compared to a owner-occupied mortgage. This risk is reflected in the rates on offer and the arrangement fees.
Tax benefits is a contributing factor to the success of buy-to-let mortgages. The income an investor earns from the rent of a buy-to-let property is taxed in the same way as salary (22%, 40% tax depending on the various bands). There are however multiple costs landlords can deduct from their tax bill: interest on mortgage repayments and maintenance costs for example.
Here's a couple of good tips for buy to let mortgages:
1. Do your research
Do you really understand what a buy to let is? The risks involved, the rewards, the likely returns? You need to do your research first. The web has got many resources including buy to let guides and buy to let information sites.
Do you know any buy-to-let investors? Speak to them. Ask them about the difficulties they’ve had to face, the errors they’ve made.
Do not forget that a buy to let may not be the best investment for you. Have you considered investing your money in shares or maybe in a high rate saving account? Buy to let mortgage rates may be low at the moment, but there is a risk that house prices might drop in the forthcoming years. Is this something you fully realise?
2. Select the right town
The “right” town has got nothing to do with price. The “right” region is a an area where people want to live, and therefore rent your property. Think about your town. Where do students live? Where are the top schools? Where are the transport links?
3. Compare the market
Do not go to the first bank you see and ask for a mortgage. Shop around, and consider using a broker that specialises in buy to let mortgages. Try specialist sites such as buy to let mortgages or compare the market mortgages to find a local adviser. It costs nothing to ask for information.
4. Do not limit yourself to your local area
Buy to let landlords typically invest in properties in their local area. Bear in mind that your town may not be the best place to invest. The advantage of a local buy to let property is that you can manage it yourself, but don’t forget that you can use the services of an agent to do that for you in you decide to invest further away from your area.
Is there a town near you that has got commuting links, or an university? This might be a better option for your buy to let investment.
5. Understand how much you would like to be involved
Buying a new property is just a start. In order to rent out a property, somebody has to organise the advertising, the viewings, and when the new tenants are in, be able to deal with repairs. If it’s something you are willing to do yourself, you can use the services of an agent that will do that for you. It is worth contacting several agents to compare what is on offer.
