Remortgaging to a BTL so much to pay!

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    Remortgaging to a BTL so much to pay!

    My wife and I are in the process of remortgaging our home to a BTL and buying a new home.

    I've been in discussions with a mortgage advisor for the last couple of weeks. The purchase mortgage is straight forward but the BTL mortgage is proving a bit more difficult to decide upon. We were edging towards a two year fixed interest only deal at 1.72% (60% LTV) but the product fee is high and our solicitor has quoted almost a grand for the conveyancing.

    The mortgage will be for 144k, we thought we would go for a two year deal because we might discover being landlords is not for us. 2 grand (product fees and legal) seems high and how do you make a product if you have to pay all those fees again in two years time?

    Do people think the two year deal with 2k in fees is a good idea?

    #2
    Most BTL mortgage lenders will use their own solicitor for conveyancing at no (direct) cost to the lender).
    You usually can add the product fee to the amount borrowed - on the basis that you hope the property value increases by at least that.

    While I appreciate that landlording may not be for you, but you may regret not taking a longer deal at the rates that are available.
    They can't go much lower.
    I've taken 5 years recently (although I am more committed to landording than you at this point!).
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      Thank JP, yeah i was thinking we should fix for longer but if landlording doesn't work out we will have to pay big early repayment charges if we sell.

      The lender our broker has recommended (BM Solutions) pays £300 casback on legal fees. Our solicitor is quoting almost a grand so thats £700, which seems a bit much.

      Comment


        #4
        What is the research provided by your broker in focusing on BM Solutions , they are no longer a lender who is the automatic 1st choice

        Ask your broker why he didn't quote the following:-
        Santander 1.39% 27 months fixed including Free Legals
        Barclays 1.41% 27 months fixed including Free Legals
        Post Office 1.48% 27 months fixed including Free Legals
        Virgin Money 1.74% 60 months Fixed including Free Legals

        There are a number of other solid lenders who deserve consideration, your broker has all your data so research shouldn't take him more than a few minuted to compare and obtain the full cost including fees over the incentive period.

        Currently lenders aren't generating the levels of mortgage applications projected in their business plan and a day does not go by without an announcement that rates have been reduced or fees changed.In my opinion given what is happening in the markets at large I have a feeling that there might be a small reduction in Bank Base in the near future. Don't make a decision on this comment, I am not George Soros but as JPKeates has rightly stated rates may not remain at this level going forward and if you intend to hold your BtL for a longer period than 24 months then I would be advocating a five year Fixed Rate thereby securing stability in your funding costs.

        Hope this helps.

        Comment

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