Repair Your Credit Profile

Before listening to ‘buy to let mortgage advice’, there are several important issues to consider in order to accurately calculate how big a mortgage you will need.  Every hidden cost needs to be taken into account to make the most out of your investment opportunity.

The main figure you need to keep in mind is 125%. Ideally you want to gain a return of a minimum of 125% on your investment, which, if you invest correctly, will cover all of your costs.

We base this figure on the assumption that the property will be empty for 2 months per year, so all your calculations should only factor in 10 months rent and not 12.This covers the possibility of the property being empty after tenants move out, along with maintenance and repair costs. This is the same percentage that banks usually use when calculating how much to lend you on a buy to let mortgage.

Select a Prime Location

Before you even think about a mortgage, you should research prime area locations for lettings, e.g.:

* Towns with Universities
* Near a Large Hospital
* Suburbs Offering Good Commuter Links
* Areas About to be Regenerated

Research the likely rental income you can expect from various 1, 2, 3 and 4+ bedroom properties including houses and apartments.

Who Are Your Tenants?

If you’re looking at university towns in the hope of letting to students the rental income will be different than if you are letting to a family.  Take these factors into account.

Other Possible Costs

* A 25% deposit for the mortgage
* Mortgage Set Up Costs
* Legal Costs
* Agent Fees (around 10% of rent)
* Upkeep & Maintenance
* Redecoration
* Auction Costs

Once you’ve costed out the entire project and decided that there could be some money to be made from buy to let, it’s time to take my first class buy to let mortgage advice and it may surprise you!

Speak to Your Bank

Resist the temptation to go to the plethora of mortgage comparisons sites yet.  Your best bet, and this is the surprising element, is to call your own bank where you have your current personal mortgage and ask them for a deal! Negotiate with them!

Mortgage rates for buy to let are currently between 4.69% - 7.39%, so armed with that information - ask them for their best price.  The call centre customer service assistant may not know what to say, so in that case ask to speak to someone who does!  Reiterate to them how good a customer you have been and learn some more of my top 10 Indian negotiation techniques to aid you.  

If that doesn’t work then move to the comparison sites… but some more useful buy to let mortgage advice is to also contact mortgage brokers. Yes, they may charge a small fee if you do take a mortgage through them, but they will likely have access to mortgages you won’t find on the the comparison sites - potentially saving you thousands.

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