• Skip to main content
  • Skip to primary sidebar
Property Investments UK Logo
Skip NavigationMenu
  • About
  • Articles
    • Latest Articles
    • General Concepts
    • Property Experts
    • Local Market Analysis
    • Investment Strategies
    • Selling Property
    • Media and Press
  • Training
  • Buy a Property
  • Sell a Property
  • Mortgages
  • Create a Company
  • Contact

An Introduction To Specialist Mortgages

16/10/2017

Today Amy and Richard look at mortgage products for property investors and at what the biggest trends are in the property investment industry when it comes to financing. HMOs are, of course, very popular at the moment but do these need a commercial mortgage or are buy-to-let mortgages available for these kinds of properties?

 

Property Expert Series: Richard Ignatowicz From Mortgage Savers


  1. Introducing Richard Ignatowicz From Mortgage Savers
  2. An Introduction To Specialist Mortgages for Property Investors
  3. What Is Section 24 And What Does It Mean For Buy-To-Let?
  4. Do Landlords Need To Set Up A Buy To Let Limited Company?
  5. What Is A Special Purpose Vehicle (SPV)?
  6. How Should Landlords Go About Finding The Best Buy To Let Mortgage?

Specialised Mortgage Products

Amy: So, can you tell me, Richard, about some of the popular products which you’re finding for your clients at the moment? What are people are interested in? what are the trends in your industry?

Richard: The biggest trend at the moment, especially with the new tax regime coming about – people are looking for greater cash flow. So HMOs – houses of multiple occupation, multi-lets – they’re very, very popular at the moment. Obviously, the standard buy-to-lets are… HMOs are the most popular trend at the moment.

Amy: Can you tell me a little bit about specialised products? Perhaps if you’re looking at doing commercial mortgages or do you need a special type of mortgage if you want to buy an HMO property on finance?

Can you explain a little bit about how that works?

Richard: Sure, Amy. Typically, most – historically – investors have gone for commercial mortgages for HMOs. The drawback here is that the rates are higher. There are now a few lenders in the marketplace that will do buy-to-let, HMO mortgages and the rates are lower on that one. So it’s something that you need to talk to a knowledgeable broker about, to tell you the pros and cons with each different aspect, and then make a decision based on that.

Amy: Absolutely. And I would guess with there being so many products in the marketplace it’s crucial to use a broker such as yourself rather than sitting on Google and trying to find the right product. I mean, it must be a mine-field.

Richard: Yeah, sure. Everybody, when they phone me up says, ‘what’s the cheapest deal in the marketplace?’. There isn’t an answer to that because it depends on the term of the deal. A two-year deal, if they Google it, will be cheaper than say a five-year deal and a five-year deal might be more appropriate in the longer term especially when you come to re-mortgage and all the costs involved. So it’s not just a case of look at the headline rate it’s the bigger picture. Most investors think for the long term and there’s a rule at the moment… I would suggest that probably 90% of my inquiries are coming in with five year fixed rate deals.

Amy: Okay, that’s interesting.Ok, so can you tell us, Richard, a little bit more about commercial mortgages? I know we’ve touched on this already with HMOs. But I know this is becoming a more popular trend at the moment, so perhaps you can tell us a little bit more.

Richard: Yeah, commercial mortgages are, generally speaking, the high-street, sort of banks etc. They will value a property based more on the rental income – what we call multiples – as opposed to what we call a ‘bricks and mortar’ situation. So, you can actually get higher valuations based on commercial lending. The drawback is that the rates can be higher at the moment typically around about 5.5% to 6.5%. But the advantage for investors is the few lenders that we go to will do it on interest only rather than repayment which makes the payments that much even higher. Most investors are after cash flow, so the interest only is the solution for them.

Amy: Okay. Brilliant.


Read More:

  1. Articles with Richard Ignatowicz
  2. Content from Our Contributors
  3. Property Investment Terminology, Abbreviations and Acronyms

Filed Under: Property Experts, Richard Ignatowicz - Mortgages

Primary Sidebar

Richard Ignatowicz
Mortgage Savers, Wilsmlow

See More Articles with Richard

A graphicical element, icon showing house keys

Secure your Future with Buy-to-Let

Investment Properties made Easy with an Average 8%+ Annual Yield, Beating the UK Average of 3-5%!

Find Out More
ON THIS SITE
  • Buy a Property
  • Sell a Property
  • Courses and Events
  • Property Crowdfunding
  • Blog
  • Reviews
LEGAL
  • Privacy Policy
  • Terms Of Use
  • Cookies
  • LOG IN

    Current members of any of our training programmes and courses can log in here:
    The Property Investor's Handbook
    The Buy-to-Let Masterclass

    PROPERTY INVESTMENTS UK

    Westminster House,
    10 Westminster Road,
    Macclesfield.
    SK10 1BX

    Company Number: 08852962
    VAT Number: 293 4194 80

    rob@propertyinvestmentsuk.co.uk

    DISCLAIMER

    Property investing, like any investment, carries risks. It is important to note that results achieved in property, from following our training courses may vary from user to user.

    For full details, disclaimer and policies click here.
    To contact us click here.

    MEMBER OF
    member-the-property-ombudsman

    Partnered with

    Property XYZ logo

    © 2021 - Property Investments UK - All Rights Reserved

    Sitemap