What you need to know about 70% LTV Buy to Let mortgages
Buy to let mortgages at 70% LTV
With the rental market having gained strength over the past few years due to first time buyers not being able to get onto the housing ladder and being forced into rented accommodation along with the growing number of people who choose to work in the city during the week while living elsewhere and so requiring a small rental property for their work week. This means that not only can higher rents be charged, but also that lenders have gradually decreased the size of the deposit you need in order to take out a buy to let mortgage.
Are there any disadvantages to taking out a 70% LTV Buy to Let mortgage?
When you first start looking at buy to let mortgages that have a 70% loan to value ratio or higher you will probably see that the interest rates look very reasonable. Many are not a great deal higher than a residential mortgage. However one thing you will have to look at much more closely is the arrangement fee. Whereas residential mortgages usually have fees between around £500 and £1500, you will find that buy to let mortgage arrangement fees start at around £1500 and once they go above £2500 they tend to then be based on a percentage of your loan amount. This means that you could easily end up paying around £5000 in arrangement fees for some products, which you will either have to find the money for, or you will have to add it onto your mortgage loan.
Get your finances in order
Before you even think about applying for a 70% loan to value buy to let mortgage you should make sure that you have a complete grasp of your current financial situation. It can be all too easy to overstretch yourself, especially if you already have a couple of properties that you let out. If you have an accountant make sure that you have the latest information regarding your income, outgoings and tax. Once you are armed with this information you can start to look at mortgage deals. The best way to do this is to use a buy to let mortgage broker who will be able to identify the most suitable mortgages for your financial circumstances. They will also be able to provide you with comparison figures that will allow you to see the effect of the different arrangement fees.