Mortgage Lenders now keener than ever to do business through brokers….. And that can only be good for borrowers….
For some years now more mortgage lending has been arranged through brokers than direct with banks and building societies. While there are some smaller mortgage lenders that only take business brokers, there are some mainstream banks and building societies that receive more than 85% of their lending through the mortgage broker channel. Many lenders have consistently offered mortgage products exclusive to brokers so whilst this is nothing new it demonstrates further the importance of brokers to lenders and therefore to borrowers alike. So if this is all old news what’s new?
Things to think about before investing in buy to let property
Investing in buy to let property can be a way to diversify your portfolio of investments, provide regular income and potentially be a source of capital growth.
House prices increased by an average of 5.8% in the year to September 2016, meaning that residential property continued to outperform many other types of investment.
However, investing in buy to let property isn’t suited to everyone. There are risks, costs and responsibilities associated with owning a property that is rented out.
If you are considering investing in buy to let property, it is essential that you understand and are comfortable with the following points:
access to money – property is not a liquid asset as it takes time to access your money when it is sold
house prices – slower growth could mean that you don’t receive the capital growth you anticipated when you sell the property
profit is not guaranteed – making a profit is not guaranteed, even if your property increases in value. Property is relatively expensive to buy and sell when you consider stamp duty land tax (SDLT) and professional fees.
Home buyers have saved money on stamp duty following the rule changes in December 2014. People are saving but they are reluctant to switch their savings accounts. And, we look at some of the tax and regulation changes that will come into effect in 2016.
In this month’s financial planning advice, we look at how retirees are helping families during their lifetime, rather than traditionally passing wealth to families after their death. When you planned to retire, did your plans look like this?
Saving up for a deposit for a mortgage can take years and requires a lot of commitment so it is important to choose the right products to help save you money. here we outline several options you should consider.
Help to buy
Help to Buy ISA
The Chancellor announced in the March 2015 budget, the introduction of Help to Buy ISAsavailable from Autumn 2015. These are aimed to help people who are saving up for a mortgage to buy their first home. For every £200 saved into the account, the government will pay a 25% bonus of £50 up to a maximum of £3000. This bonus is then used for the purchase of a home up to the value of £250,000 or £450,000 in London. It is possible for two people who are saving for a mortgage together to both receive a bonus as the accounts are per person rather than per household. Any interest you earn from your help to buy ISA will be tax free, however, you must make sure that you don’t pay into another cash ISA in the tax same year.
Investing in buy to let property can be a way to diversify your portfolio of investments, provide regular income and potentially be a source of capital growth.
