Mortgages: fixed or variable rates?

The mortgage world has deeply evolved in the last 3 years. The type of mortgages available is much smaller than before, 100% LTV products are almost gone, and lenders in general are becoming a lot more careful. Gone are the days where lenders allow loans equal to 5 times your yearly income, and for customers with bad credits rating, having a mortgage has become extremely complicated. Despite the credit crunch, it is still possible to find some great mortgage rates on the market. We give you seven top tips to help you get the best mortgage deals:

1. Save for a larger deposit: while 90% Loan to Value mortgages might still be offered by a few mortgage lenders, the best mortgage deals are normally available on less than 70% Loan to Value mortgages. Try to you save as much as you can afford for your initial  deposit.

2. Large deposits go a long way for remortgage deals as well: because of the collapse in home prices, you may well find that the Loan to Value for your property is greater than when you started your initial mortgage. An option could be to use the money in your saving accounts towards a greater deposit in order to get a better deal.

3. Know about your credit record: the mortgage applicants worst affected by the credit crunch are mortgage applicants with poor credit, also known as “sub prime”. If you have adverse credit, the rates available to you can be significantly greater as the mortgage lenders try to guard themselves against the danger of lending funds to a client with a poor credit record. Make sure you know your credit record and take corrective steps to bring it back on the right track.

4. Talk to a independent adviser: If you’ve got an unusual case, e.g. if you’re freelancing, it is really important that you speak to a mortgage adviser. A good mortgage advisor will talk to you to understand your personal situation and find out the top mortgage deals available for your circumstances.

5. Select fixed rate products if you would like to have security: fixed rate products guarantee that your monthly mortgage repayments will stay the same and won’t fluctuate with fluctuations in the Bank of England base rate. This security doesn’t come free though, as fixed rate products are generally more expensive overall than variable rate mortgage deals.

6. Go for a tracker mortgage deal for the best rates: tracker interest rates go up and down with the Bank of England interest rate. The mortgage interest rates offered for tracker mortgage product are usually lower than fixed rate deals. There is always the possibility however that the Bank of England rate could increase and cause greater repayments if you choose a tracker mortgage.

7. Be careful with the arrangement fees: the best mortgage rates typically have high arrangement fees. It is crucial that you calculate the total cost of your mortgage over the whole term, taking the arrangement fees into account, to find out what is the top mortgage deal for your circumstances.

Buy to let Mortgages – a bit of advice

Buy to let mortgages have become available in the United Kingdom in the late 90s. A buy-to-let mortgage is a product used by property investors to borrow funds to be used to a property with a view to let it out it to tenants.

For owner-occupied mortgages, mortgage brokers determine the amount an applicant can borrow based on their annual income. It is not so for a buy-to-let mortgage.

Usually interest rates offered for buy to let mortgages are quite similar to regular mortgages, but are generally higher and come with higher fees. lenders believe that a buy-to-let mortgage carries a higher risk than a regular mortgage. This risk is reflected in the rates on offer and fees.

House prices have hugely increased in the United Kingdom during the last five years. The result has been a strong development of the rental market as many people cannot afford the deposit required for a regular mortgage. This has made buy-to-let very attractive to investors.

It is common at the moment for buy-to-let properties to be let unfurnished, also known as “part furnished”, as buy-to-let properties virtually always include white goods, fitted bathroom, curtains and carpets. Very central London is an exception where furnished buy-to-let properties are more likely to let because of the large proportion of business tenants in the area.

For a professional buy-to-let landlord, this makes life a lot easier. All you need to do to prepare a property for new tenants is at most a bit of painting and carpeting work. When it comes to choose carpets, paint colours and curtains for a buy-to-let property, it is important to choose a  neutral style to allow tenants to personalise the property with their own soft  furnishings.

This also makes life a lot  easier for property landlords when it comes to comply with safety regulations. A furnished letting property will usually include cushions, mattresses and pillows . Because these soft furnishings are provided with the property, it is the landlord responsibility to ensure that they are in compliance with the various safety regulations in place.

You should not that in all cases the landlord is fully  responsible for the safety of gas and electrical installations as well as appliances supplied with the property. This needs to be ensured via regular checks and proper record keeping. It comes without saying that rental properties, like any other  property, ought to have fire alarms installed.

These  regulations are usually quite complex and updated regularly. Letting agents are usually well prepared to understand and ensure compliance with these safety regulations. Often safety compliance is easy to attain, but for a new property investor this is something they must become familiar with from the moment they go ahead and put a property on the market.

Hello world!

Welcome to WordPress.com. After you read this, you should delete and write your own post, with a new title above. Or hit Add New on the left (of the admin dashboard) to start a fresh post.

Here are some suggestions for your first post.

1. You can find new ideas for what to blog about by reading the Daily Post.
2. Add PressThis to your browser. It creates a new blog post for you about any interesting  page you read on the web.
3. Make some changes to this page, and then hit preview on the right. You can alway preview any post or edit you before you share it to the world.