Finding the best buy to let mortgage deals

Recent drops in house prices coupled with the imposition of new regulations that added unexpected costs to the operation of buy to let properties may have dampened the appetite of investors. Some actually think the buy to let market has just about reached its peak. Does that mean there is no more opportunity in it?

Not necessarily. Mortgage brokers, who usually have a fairly good idea of the market, believe that investments in buy to let are still a good option, but extra care must be taken to obtain a good deal and to get the best buy to let mortgage. It may be that you can no longer make quick returns from a buy to let investment, but there is still good money to be made if you are careful and are ready to accept a longer timeframe on your investment.

The best buy to let mortgage for you will obviously depend on how much you can raise as deposit and on the purchase price. After these two factors, lenders will also look at the type of property, your personal credit history, your acceptance of risk, the degree of after care, time scale to retirement and ongoing contributions.

You will have to ask lenders their exclusions based on the type of property. These types of property can dictate the mortgage that you can get. There is plenty of detail to be studied here, and it may enable you to make a more informed decision if you review these aspects with an expert in the business, such as specialist buy to let brokers.

Good credit ratings will qualify you for the best buy to let mortgage deals and get you advantageous interest rates.

Risk tolerance

Your acceptance of risk determines the level of exposure you want to have over events that are not within your control. When you talk of mortgages, there is only one real risk: interest rates. There are two main categories of interest rate, fixed or variable; however, under each one you may find many types (fixed or capped, under fixed; and under variable, tracker, discount, stepped, standard variable).

You have to watch for the tie in/lock in periods that may exist with all these products. These refer to the minimum periods that you should remain with the lender without incurring financial penalties if you wish to redeem the loan because you want to sell or remortgage the property.

You may find lenders who offer all the above mortgages, while others offer only some kinds. The type of mortgage you want dictates the lender you can approach. Once you're decided on what type you want, you can search use a broker, such as our broker partner who has access to the whole of the market.

There are mortgages that are not generally advertised and a mortgage broker usually has access to better deals with lower rates than high street banks.

Some people are more comfortable having face to face contact with their lender. If this is so, then you can really only approach high street banks and building societies. On the other hand, there are some lenders who will liase only with a mortgage broker. You may want to find a mortgage broker you're comfortable with and who's efficient in handling your concerns.

A good mortgage broker is important for a buy to let investor

The terms of your buy to let mortgages needs to fit in with your target age when you wish to retire, though these type of investments may provide useful income in your later years.

If you need to have a positive cash flow from your buy to let investments, and this is possible only from an interest only mortgage or a long term repayment mortgage, then you'll have to find the appropriate lender.

Getting a good balance of all the factors above can be time consuming. Comparing many different plans can be confusing and take up valuable time. A good mortgage broker should become a valuable member of your team.

Building a long term relationship with a broker who understands your investment goals and is familiar with your financial circumstances can save you valuable time and effort.

Using their relationships and goodwill with lenders can often help you make short cuts in obtaining money or access less publicised funds.

In a competitive situation to secure new property either at auction or through estate agency contacts, having ready access to funds can make all the difference between success and failure in your buy to let investment strategies.