As I am sure you are already aware, the changes in Stamp Duty Legislation came into force on the 1st April, 2016 affecting additional Stamp Duty charges on the purchase of a second home.
Did you complete the purchase on your current property in March 2016?
Many homeowners and landlords will be due for a re-mortgage on these properties, and fortunately this is an area that A Move Brokers Ltd specialise in and can help you with. You can begin the re-mortgage process up to 6 months before the fixed rate ends to ensure a smooth transition from one rate to another competitive rate.
Similarly to this, there has been an increase in the bank base rate affecting all Standard Variable rates. Many of you may not be aware that this increase in mortgage rates could affect your monthly mortgage payments and therefore you could currently be paying more on a standard variable rate mortgage compared with taking advantage of securing your mortgage as a fixed rate mortgage.
Securing your mortgage into a fixed rate, eliminates the possibility of having your mortgage payments increase each month like they would on a Standard Variable rate. Therefore, it is important for clients to secure their current mortgage onto a new fixed rate before the end of their fixed rate term to ensure you avoid the increases in your payments. The impact of this can also cause the return from rental income to reduce as you would not receive enough to cover the mortgage payments therefore ending up out of pocket each month, instead of securing the fixed rate and having the mortgage covered with rental payments from their second homes.
Many landlords feel as though Buy to Let properties have been intentionally targeted. With the amount landlords must earn in rent to cover their mortgage increasing from 125 per cent to 145 per cent, many are left feeling hard done to.
This is why landlords are now looking to re-mortgage their properties, to secure a better rate, even if it means paying early repayment charges. If you are looking to re-mortgage your Buy to Let property, but not in terms of borrowing more money, exceptions may be made for a better deal but it’s unlikely as not many lenders see this as beneficial. Early repayment charges, the landlords feel this is worth paying, given the circumstances of the additional tax rates increase.