Buy to Let Mortgages Prediction in 2013

There is a vein of positivity running through the buy to let mortgages market. According to research carried out by CHL Mortgages, 71% of landlords and buy to let mortgages holders feeling upbeat about the future of the buy to let sector in 2013 and a third plan to expand their portfolio in the near future.

However 56% of landlords and investors told CHL Mortgages researchers that they would be holding off on buying or selling any properties for the next year or until the current economic uncertainty is resolved. And with the government’s austerity plans now proposed to continue well into 2018 – an increase of more than 3 years on the original 2015 prediction – when this stability will occur is anyone’s guess.

Buy to Let Mortgage Rates in Crisis

There is talk of buy to let mortgages UK being linked to EU regulations, which stipulate that buy to let mortgage rates must be based upon an individual or company’s declared annual income, as opposed to the rental income capabilities of the property in question. Many believe that this could signal the end of the buy to let mortgages market as, under EU regulations for people seeking a mortgage, buy to let rate assessments will have to fall in line with residential mortgage rates.

Market Increase for Buy to Let Mortgages

Despite recent difficulties, the Council of Mortgage Lenders has reported that buy to let mortgages now comprise 1/8th of the total number of residential mortgages – an all time high. And with rents having increased throughout 2012, with this trend looking set to stay on course for 2013, now seems like a good time to invest in buy to let property if one is able to raise the necessary financing.

Hot off the press are the new Leeds Building Society buy to let rates and reduced rates on its 10 year fixed range of buy to let mortgages. A two year buy to let mortgage at 3.55% is now available from LBS with up to 75% LTV, no higher lending charge and 10% capital repayments allowed without penalty for each year. In addition, Phil Coombes, Head of Intermediary Sales at LBS, has been quoted saying, ‘We believe it’s a very good time to lock into a low fixed rate and have reduced rates on our buy to let deals by up to 0.7%’.

Is the Time Right for Buy to Let Mortgages?

Since this issue has experts so divided, the best choice for people looking to purchase buy to let mortgages seems to be – as always – to obtain expert financial advice before making a decision either way. Property is a great investment and buy to let mortgages are plentiful, but the financing options for obtaining such a mortgage are still murky. For more information visit www.themortgagebroker.co.uk, for up-to-date advice about buy to let mortgages, rates and financing options.

7 Different Types of Mortgages

Standard Variable Rate – This is your most basic type that a bank will offer you. It comes with ‘no frills’, and you can be assured that each time you see base rates change, or if the bank just thinks it wants to, your interest rates will change too.

Fixed Rate – This one is definitely the most popular, because most people don’t like risk when money is involved. With a fixed rate, your interest rate will remain the same throughout the life of your loan, regardless of market fluctuations. You will save when rates rise above your current fixed rate, but lose out on any reductions from rates going lower than what you’re locked into.

Capped Rates – These are most often based on a lender’s SVR, and this type of mortgage product follows normal base rates and interest charge changes, but will have a cap level set. Let’s say you cap your interest rate at 5%. That means that should the base rate push your lender’s rate 5%, you’ll stop paying extra on your monthly payments. When rates drop below your cap, so do your monthly payments. It’s a kind of security blanket that protects your from high rate rises occurring on the market.

Discounted Rate – This mortgage is one where a lender gives you a discount on their SVR (standard variable rate). Let’s say you got a 0.5% or even a 1% discount against their SVR. That mean should interest rates drop, you save money. But should they rise, then your monthly payments rise as well.

Fast-track Mortgages – some people are in a hurry to get their mortgage. If this is you, and your applications attests that your credit is good and you’re not a risk, then you might be offered one of these. It’s a way for the bank to speed up processing your loan by waving you having to provide payslips, etc. Truthfully your broker was probably asked to check them, and at times you may be randomly selected for a check anyway.

Cashback Mortgages – With this one, after your mortgage is complete, the bank pays you back a specific sum of money. And you can usually combined these with SVR, or fixed, or other mortgage types. Sounds great, right? Well, the downside is, your interest rates will be higher so they can get back what they pay to you for the cashback.

Buy To Let – This specialist rate is for people who are buying a specific property they don’t plan to live in, but will be renting out. Because it’s going to be rented, some new risks are involved, and the lender has to make some special conditions that apply to the mortgage, so they will be protected.