Debbie Sumitra, Conveyancing Solicitor in Reading at Hewetts Solicitors explains…
In the past few years, there has been a rise in buy to let mortgages as an investment option with rental yields that can rival those of traditional investments such as stocks and bonds.
However, the appeal of this type of investment is not without its risks, which you need to be aware of before committing your money to a buy to let mortgage.
Before getting a buy to let mortgage, you need to know if it’s right for your circumstances and most importantly, what the penalties are for repaying it early.
When interest rates are low, it may make sense to repay your buy-to-let mortgage early.
However, not all mortgages are eligible for early repayment and you may find yourself stuck with an expensive penalty fee if you need to pay off your mortgage before it’s due.
This is why it is so important to look into what conditions apply for repaying your mortgage early, before taking out any loan. Ideally you should get a solicitor to look at the terms and conditions before you sign.
Most lenders will charge a fee for early repayment of your buy-to-let mortgage loan, but they may waive these fees for good customers who are taking out another loan with them. If you haven’t tried this approach then it may be worth a go.
Many landlords decide to use buy to let to develop a property and sell it after a short period of time when it has been upgraded.
Sometimes a property can be bought as a short term let and then the landlord turns it into their residence.
They may want to buy the property and then improve it by adding an extension for example, and then remortgage because they can take out equity of the new value and reinvest this.
It could be that remortgaging allows a landlord to buy another property because an opportunity has come up.
A landlord might want to get a better mortgage deal as interest rates have gone down. And finally, landlords might want to reduce their portfolio or pay down debt on one property by selling another.
Whatever the reasons for paying back a buy to let loan or mortgage early, you may want to speak to Debbie Sumitra, our conveyancing solicitor at Hewetts Solicitors in Reading.
Call Debbie on 0118 957 5337 today for help with any repayment of buy-to-let mortgages as she specialises in this area.
Published on 25/01/2022