Buy to Let Remortgage
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Buy to Let Remortgage
Nik Mair talks all about remortgaging your Buy to Let property.
Can you remortgage on a Buy to Let?
Yes, absolutely. It’s no different to remortgaging a residential property. If your rate is due to come to an end, we’ll scope the market to see who’s offering the most suitable rate of interest for you at that present moment and apply to that particular lender. The entire remortgage process works no differently to any other remortgage on a Buy to Let property.
Why remortgage your Buy to Let?
There are many reasons actually, because as an investor you obviously want to make the most capital gain from your rental income. If you can get a better interest rate therefore you’ll make more money per month from the rental income.
Lots of people will refinance a Buy to Let property if there’s equity, as they will look to release some to potentially invest into another Buy to Let property. You could remortgage a Buy to Let property to pay for refurbishment works, either in that property or even your main residence. You could even refinance a Buy to Let to pay off a tax bill or to gift it to their kids and get them onto the property ladder.
How do I remortgage a Buy to Let?
If you’re based in London, London Mortgage Solutions can help you with that. We’ll ask for the standard documents and about the current rent the property is achieving etc. We will then assess the current property against the rental income and the applicant’s tax status and look to achieve the loan amount that’s required.
Obviously when it comes to Buy to Lets through a limited company, this is another niche area and again we can assist with this, especially for individuals really looking to grow their property portfolio that may have sought tax advice and been advised to to purchase new properties via a limited company. We can refinance existing properties within the limited company as well.
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Can I be refused a Buy to Let remortgage?
You can be refused. It could be as simple as a credit score failing, so it’s always best to ensure that you’re up to date with all your direct debits and any mortgage payments. If the property gets down valued, you may be refused the loan amount. There could be Japanese knotweed perhaps at the property, there could be a few reasons, but it’s not the end of the world.
We would see if we can get to the bottom of any problems with your current lender or otherwise reapply to another lender to try and get it resolved.
How long does it take to remortgage a Buy to Let?
Four to six weeks for typical applications, depending on the current lender service levels and timescales that they’re working with.
What sort of costs are involved and do you pay Stamp Duty when remortgaging to a Buy to Let?
No, you can’t pay Stamp Duty twice throughout the mortgage term, you only pay it when you buy the property initially.
However, there are other costs involved such as a valuation fee and the lender may charge a product fee. There may be a conveyancing fee, but typically when it comes to remortgaging, there are lots of incentives from lenders that offer a free conveyancing and free valuation, as well and no product fees.
It’s about assessing the right product for the client at the time of applying and finding out what’s important for the client, then we can then find a product that’s cheapest and most suitable for the client based on their circumstances.
What are the benefits of remortgaging a Buy to Let property?
You could get a better rate, increasing the return on rental income. You could release some equity for refurbishment works on that property itself or maybe another property or for a wide number of other purposes.
There are multiple benefits to remortgaging, and like any mortgage, every rate comes to an end at some point. It’s always best to ensure that one does not go onto the Standard Variable Rate (SVR) because that will eat into profits and defeat the purpose of actually having an investment property.
If anyone’s got an investment property or is looking to expand their current property portfolio, give us a call and see how we can take a creative look at the current properties and see how refinancing could achieve the client’s goal.
Your property may be repossessed if you do not keep up with your mortgage repayments. The Financial Conduct Authority does not regulate some Buy to Let Mortgages.
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