Why use an independent buy to let mortgage broker (advisor)?
Getting a buy-to-let mortgage through an independent broker/advisor can provide landlords with a better deal.
Applying for a buy-to-let mortgage direct to a lender can take more time than using an independent mortgage advisor.
Buy-to-let mortgage brokers have access to many mortgages and can help landlords to get the best deal.
This can be more beneficial to applying direct.
What are the basics of using a buy-to-let broker?
Nearly 75% of all UK mortgages are arranged through brokers/advisors, not direct, and lending criteria have become more complex in the last few years.
Buy-to-let mortgage brokers can help landlords navigate through the maze of mortgages available, and guide them toward the most appropriate lender.
Many lenders offer different buy-to-let mortgages with varying mortgage product features and benefits for landlords who do not wish to apply direct.
Finding the best buy-to-let mortgage can be complicated, making using a broker a good option for landlords and first-time buyers.
A buy-to-let mortgage broker will often have access to a greater choice of mortgages than you are likely to find by going direct to lenders.
Most buy-to-let mortgage lenders reserve particular mortgages which they make available only to brokers.
There are different types of buy-to-let mortgage brokers, including:
Tied mortgage broker – this type of broker is connected to one lender or a panel of lenders, limiting them in the number and types of buy-to-let mortgages they can offer landlords.
Their close links to the lender mean they may be able to offer landlords exclusive mortgage deals.
Independent mortgage brokers aren’t tied to any lender, so they can offer landlords a wider selection of buy-to-let mortgages, and their advice is totally impartial.
It is worth researching the buy-to-let mortgage products directly to ensure you get the best deal from a broker.
What are the benefits?
Buy-to-let mortgage brokers are professional experts, and as such, can get landlords great deals on mortgages.
Some of the benefits of using a buy-to-let mortgage broker rather than applying direct include:
They often get landlords a better deal
Around 75% of lenders will only offer their buy-to-let mortgages through a broker, not directly.
If you’re looking direct to lenders as a landlord, you will only be able to access about 25% of the buy-to-let mortgage products on the market.
Mortgage brokers are duty-bound to help you in your buying decision
As trained professionals, mortgage brokers are committed to helping landlords to get a suitable buy-to-let mortgage.
If you go direct to a lender, you run the risk of taking out a buy-to-let mortgage that may not be the most appropriate for your needs, as they will only offer their own range of mortgages.
Mortgage brokers process.
If you go direct to a lender, they may only tell you the information they need and how long the mortgage application process will take.
A buy-to-let mortgage broker will help landlords understand the process’s different stages.
The mortgage application should be right the first time
One of the main reasons for rejection of mortgage applications is that they are incomplete or outside of the lender’s policy when landlords apply directly.
A broker knows what is needed and should ensure that everything is correct before it goes to the lender.
A broker will communicate effectively with the lender
An experienced buy-to-let mortgage broker should have contacts in the right places, so they can get updates and progress more quickly than if you go direct to a lender.
A mortgage broker will save you time.
Chasing up a mortgage application with a lender can be time-consuming.
A mortgage broker will know who to call and when.
This can be preferable to applying direct.
Can I get a buy-to-let mortgage myself?
Applying for a buy-to-let mortgage direct is not as easy as getting a standard residential mortgage.
If you want to invest in property and become a landlord, but you don’t have enough capital to buy a property outright, you will need a buy to let mortgage.
Going to a lender direct means that they will examine aspects of your financial situation, including your credit score, any outstanding debts, regular expenses and earnings.
Some landlords prefer to apply direct, others prefer to work through a broker who goes direct on their behalf.
Will I get a bigger loan from a buy to let broker/advisor?
A buy-to-let mortgage broker may be able to get landlords a bigger mortgage than if they go to a lender directly.
Like residential lenders, buy to let mortgage lenders have their own way of determining a maximum buy-to-let mortgage.
Landlords may not get a larger loan offer, but they might substantially reduce their monthly payments by going through a broker and not direct.
A buy-to-let mortgage broker will negotiate the lowest rate for landlords, and because they acquire high quantities of mortgages, mortgage brokers can pass volume discounts on to landlords.
Banks can only offer their own buy-to-let mortgage products if landlords go to them direct.
How much does a buy-to-let mortgage broker/advisor cost?
A buy-to-let mortgage broker usually charges a fee ranging from 0.3% up to 1% of the loan size.
So, on a buy-to-let mortgage loan of £150,000, the broker fee at 0.3% would be £450.
A buy to let mortgage broker will usually do far more than just recommend you a mortgage product.