Buy to Let Secured Loan - Top Tips
Whether you would like to invest in home DIY, a new kitchen, new double glazing or simply would like to release some capital from your rental property, obtaining a buy to let loan can be the ideal solution. Read on to find out how we can help you compare buy to let loans to ensure you get the available deal on offer today.
If you happen to be a landlord there are a multitude of reasons you may need to borrow additional money against your buy to let (or BTL) property.
It's definitely worth considering a secured buy to let loan, especially if you have equity in your BTL property or need to borrow a significant amount of money.
How to compare secured loans for landlords
1. Work out what secured buy to let loan criteria make you elgibile
Different types of secured BTL homeowner loans exist in the UK market, each has with it's own specific lending criteria.
Before comparing buy to let loans, you'll need to carefully review your own circumstances and then work out exactly how much you'll need to borrow and for how long.
2. How much will you need to borrow?
One of the key benefits to choosing buy to let secured loans is they will typically allow the borrowing of a larger amount; especially useful if you're looking to carry out any home improvements to your property.
But, if the total amount you are looking to borrow is restricted by a number of factors, like the Loan to Value (or LTV) you need, then most lenders will specify a maximum LTV they will lend on, so you would need to exclude those which you won;t be eligible for.
LTV is simply a numerical measure (typically a percentage) of the borrowed sum compared to your property's equity. A lower LTV will mean a lower rate of interest that you're eligible for.
3. What is the loan term required?
Secured BTL loans usually are taken between three and twenty-five years, so choosing your ideal term is an important step in finding the right loan for you.
You should weigh up overall costs of your buy to let loan by managing monthly repayments, whether this is directly from your funds/savings or it's fully covered by any rental income received.
If you have a shorter loan term, you're likely to be repaying a lower amount so you'll need to work out how much you will be able to afford in order to commit to your monthly repayments and under this, the minimum term you will need to spread your loan over.
How to find the cheapest secured buy to let loans
Once you have decided on what you need from your loan you can start searching for the cheapest BTL secured loans on property which match your requirements.
The key factor which will determine your overall loan costs is the interest rate or APR. As expected, having a lower APR, you're likely to pay less in interest on your secured buy to let loan.
But other costs need to be taken into consideration before you make any decision, like, for instance, any upfront application fees, valuation costs and any applicable early repayment penalty fees (only if you believe you would need to repay the loan off in full before the term ends).
The best ans simplest way you can do this is by undertaking a full secured loan comparison.
Are secured BTL loans right for you?
Bear in mind that securing any loan against your property's value, even though it's not your own home, can still be a risk.
Although a buy to let mortgage property loan allows you to borrow more than by simply using an unsecured loan, if you so not maintain your loan repayments, your lender is well within their rights to sell your property in order to pay off your buy to let homeowner loan.
Whilst many people do nt experience any repayment difficulties, it's precisely this type of risk which makes it essential you ensure your the loan is affordable based on your current income levels. It's something you should carefully consider if you decide to rely on rental income to repay your borrowing.
Our secured buy to let loans application allows you access to the leading buy to let secured loans compared side by side. For more information on their lending criteria and costs contact us to get the best secured loans buy to let property deals for your needs.