Hi, Peter Jones, author, property investor and ex-chartered surveyor. And in this short video I want to talk about the right way of finding the very best buy to let mortgage product or deal, because in my opinion there is one right way and there’s several wrong ways.
So, let me start with wrong way number one, and that would be to decide that you’re going to do it for yourself, to walk into your local high street bank, and ask them for a buy to let mortgage. Why is that the wrong way? Because if you go into a typical high street bank, I don’t know how many buy to let products they’re going to be able to offer you, maybe a dozen, I don’t know, but the thing is it’s going to be very limited. Their range is going to be limited because they can only offer you the types of mortgages that that particular type of bank offers.
So, you may have individual needs, you may have individual aspirations which means that although they may be able to give you some kind of a mortgage which might just about work, it may not be the very best mortgage for you. It really is a case for a square peg in a round hole, that kind of thing. So, you don’t want to do that.
So, wrong way number two is to decide that you’re going to do it yourself and to go online and you can go onto some amazing websites which will take you through all kinds of different mortgage products, and you can compare them, and you can see what they all cost, and it all looks good but again, do you actually know what you’re dealing with? Probably not, because there are just so many different products out there and different lenders with different criteria.
For you to actually know what is right for you is going to be very, very difficult unless you’re in financial services, or unless you are a mortgage broker. Bit of a clue there where we’re going with this.
So, I would definitely not just go online and hope that through sheer luck, by going on a comparison site I’m going to find the best mortgage. Do not do that.
Wrong way number three is to go down to your local estate agent, see that there’s somebody sitting at the back who is a mortgage broker and say ‘well I’ll use them then’. Well, it might be quite handy, you can just walk in off the street, you can probably have a cup of tea with them, they’ll probably be very nice and friendly, but the problem with using a mortgage broker who’s attached to an estate agent is that very often the big national chains of estate agents have tie ins with particular lenders, so you’re actually no further forward then you would be if you walked into the high street bank. The choice is going to be limited and you’re not necessarily going to get the mortgage which is right for you.
So, what is the right way? The right way, and the very best way, is to have a good mortgage broker. Preferably a mortgage broker who has got access to the whole of the market or most of the market, a mortgage broker who is an investor themselves so they understand what you are trying to achieve, or if they’re not an investor themselves, they have been doing it long enough that they understand exactly what an investor needs and wants, and one of the great things about having a mortgage broker who knows what they’re doing is that they should be able to help you to plan into the future, so they can help you plot your course, so, as you start building your property portfolio and building your property business, they can take you from lender to lender in the right order so that you don’t run out of lenders.
One of the big worries which sometimes people ask me about is ‘don’t lenders actually limit the number of mortgages which they’ll give any one particular individual or limited company’? The answer is yes, it can be that one lender may lend you up to £2 million or another lender may say you can have 4 properties, but what you need is a mortgage broker who understands all the different criteria of the different lenders, so that they can then take you from lender to lender so that you never actually run out of lenders that who lend to you.
And, this is actually quite a big deal because before covid there was something like two thousand different buy to let products available on the market being offered by up to about a hundred different lenders, and a lot of those lenders are lenders which you and I probably never even heard of.
Now, since covid that’s all changed and the number of mortgages has decreased but over the future, depending upon when you’re watching this video, many of those lenders who dropped out will come back, or if they’ve pulled products they’ll bring other products in and it will all increase again in time I’m sure. Even with a limited number of products like that as there probably is now with covid, it’s still fairly complicated so you need help so don’t try to do it all yourself. So, get yourself a good mortgage broker.
If you want a recommendation for a good mortgage broker then just email me thepropertyteacher@gmail.com and I’ll be very happy to put you in touch with my mortgage broker.
Peter
Peter Jones
(ex) Chartered Surveyor, author and property investor
https://thepropertyteacher.co.uk
PS. By the way, I’ve rewritten and updated my best-selling e-book, The Successful Property Investor’s Strategy Workshop, which is an account of how I put together my multi-property portfolio, starting from scratch and with no money of my own, and how you can do the same.
For more details please go to:
https://thepropertyteacher.co.uk/the-successful-property-investors-strategy-workshop
