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Buy-to-Let Finance Checklist

Tuesday, 11th August, 2015

1. Know the value of your buy-to-let property or portfolio

Make a note of the following:
  • The current market value of the new property or your existing buy-to-let portfolio
  • Your current or expected rental income
  • Income/costs relating to your buy-to-let property
  • Details of any outstanding buy-to-let mortgages

2. Clarify your purpose

Why are you investing in buy-to-let property?

  • To gain financial freedom?
  • For additional income?
  • To supplement you pension?

3. Do your own research

The internet gives you access to a huge amount of guidance about buy-to-let products, which can help to give you some useful background information before you apply for a mortgage. For example, NLA Mortgages has a free online buy-to-let mortgage finder on its website which enables you to compare buy-to-let products from the whole of the market.

4. Seek out a suitable buy-to-let mortgage broker

Look for a broker who is independent and offers products from the "whole of the market", like NLA Mortgages. Arranging buy-to-let finance is a niche area and you may benefit from the advice of a specialist buy-to-let broker who has extensive knowledge and experience of the market. 

5. Find a mortgage to meet your individual requirements

There are hundreds of buy-to-let mortgages currently available in the UK and there are many different factors that will contribute to the product you choose.

Some points to consider include:

  • Would you prefer a fixed or variable rate?
  • What are the upfront costs of the product e.g. broker fees, valuation fees and lender arrangement fees?
  • What is the total cost of the mortgage over the term of the loan?
  • How will rising interest rates change your monthly costs?
  • For remortgages - are there any Early Repayment Charges to consider?

6. Seek suitable tax advice

When investing in a buy-to-let property, there will be a number of things for you to consider, one of which being how owning another asset will affect your taxes. Make sure you speak to a qualified tax adviser who can explain the tax implications relating to your property investment and how you may be able to reduce your payments.

7. Set-up a savings plan

It is very important to set up a savings plan alongside your property investments to help cover any rental void periods or unexpected costs such as bursts boilers.

As well as having a solid savings plan, you should also take the time to plan your budgets in advance to make allowances for interest rate rises. It is much better to be prepared for increased mortgage payments beforehand and this will help reduce the levels of stress experienced when it happens.


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