First Buy To Let Venture

awsome

We are about to venture into our first Buy To Let Property. We plan on re-mortgaging our existing home of the past 14 years, on a buy to let basis and then moving to a new 3 bedroom property.

The new property needs a fair bit of work, but has huge potential, so hopefully if house prices do not drop considerably over the next few years, we stand to increase its value by about £50K. The plan is to renovate the property over 18/24 months, then remortgage this property as a buy to let and move again in the same fashion as the first move.

My question - What is the best option for mortgaging the new property?

I am looking at 2 year fixed rates (not BTL) interest only at around 4.3%, then reverting to SVR with no tie in after the 2 year period. The average cost involved with setting up this type of mortgage is @£800 + conveyance.

Would we be better off from a setup cost point of view, looking at longer fixed period mortgages which are portable, so we can simply upgrade the mortgage on our next move?

Or are there other option which we have not considered, bearing in mind we are trying to keep the monthly payments down so we have plenty of money to invest in the renovation work.



Any advice will be appreciated.

Regards

Nigel

meanmachine_2

awsome wrote:

Would we be better off from a setup cost point of view, looking at longer fixed period mortgages which are portable, so we can simply upgrade the mortgage on our next move?

Nigel

I think you'd be better off putting your money in a high interest account.

Yes, you could make 50K...IF the market continues to soar like it did up until 12 months' ago.

If it stays flat then you'll be spending 50K to recoup 50K.

If it falls in that time you'll be spending 50K and losing another 50K.

But it's up to you. High risks can bring high returns, as well as high losses. But I'd never EVER gamble the roof over my head in this way.

Switch off Property Ladder, read a good book and broaden your mind. Property's a dead dog. No more easy money there, I'm afraid.

nrsql

Have you looked at the £800 setup fee?
You need to check whether you will be saving this amount by the reduced interest rate compared to other mortgages with a higher rate but lower fees. Also bear in mind that if you take a lower fee you have the difference at your disposal.