Buy to Let Mortgage Brokers are wakening up to an announcement from Precise Mortgages of a new product launch. Precise Mortgages offers a Five Year Fixed 75% LTV HMO Mortgage at just 3.99%.
The lender popular with property investors has launched in September 2016: 10 Year Fixed Mortgage for HMO’s at just 3.99%. Precise offering two products 10 year fixed or 5 year fixed. At the same rate of 3.99% for House in Multiple Occupation, even with the same product fee of 1.5%.
The lender has been making lots of advances to gain a bigger share of the Property Investor Market. It has a lot of niche criteria too such as: With a maximum term of 35 Years and maximum age at application of 80. You can be 115 years old at the end of the mortgage term.
This mortgage product is for HMOs with up to 8 bedrooms, our northern property investors may have to watch out for the minimum valuation of £150,000 and southern landlords at £250,000.
The lender is pro-landlord you can have unlimited number of background properties with other lenders (max 10 with them). Landlords with less than two rental properties that have not been held for at least 2 years are restricted.
What’s so good about a 10-year fixed?
A long term fixed mortgage can give a property investor certainty. Typically after say a 2 year fixed rate period has come to an end, the product reverts back to the lenders Standard Variable Rate (This can be, but not always, linked to the Bank Base Rate or other indices). Your payments after the intial period can be varied – it is typically higher than the initial period rate so your payments go up and with a variable indices payments may go up further over time.
A 10 year fixed, give the property investor the certainty that for 10 years there mortgage payments are static.
In addition, the property investor is not paying for Mortgage Broker, Valuations, Conveyancing and Lender Fees – every time they decide to re-mortgage to exit the lenders SVR onto another mortgage product.
What’s not great about a 10 year fixed?
A long term fixed mortgage ties you to the mortgage lender for that period. If you wish to re-mortgage or even sell the property, you are likely to have to pay Early Repayment Charges. This is a fee the mortgage lender charges you for exiting the 10 year fixed deal early.
You may wish to sell or re-mortgage the property, perhaps the property has risen in value and you wish to release the equity or sell – (to head out to a sunny beach). The benefits are potential of savings but moreover certainty.
For HMO Mortgage Advice feel free to call Bespoke Finance on 08009202001 or email email@example.com.