An expert’s guide to buy to let secured loans

If you’re a landlord and are looking to release equity in your BTL property without changing your mortgage rates, a buy to let secured loan could be what you are looking for. There are no rules regarding what you can spend the money you can borrow against another buy to let rental property or multiple properties within in your portfolio. This includes HMO’s, student accommodation and holiday lets.

What is a secured buy to let loan?

A secured buy to let loan is a second charge mortgage which allows you to borrow further funds up to 75% LTV secured against your buy-to-let rental property. The purpose of the loan is to allow existing landlords with equity to use their current property assets as a way to secure funds without having to take out a new buy to let mortgage.

Much like a regular buy to let mortgage, with a secured buy-to-let loan, homeowners can borrow up to £2.5 million with terms up to 30 years. However, the secured buy to let loan generally has more flexible lending requirements than the typical first charge mortgage lender.

Where can I get a loan?

Buy to let loans are made available through mortgage and second charge brokerages and are rarely available to the general public directly. Different lenders will offer different rates so it is well worth looking at a range of options from a broker before choosing a specific lenders product.

Secured buy to let loans may be interest only, fixed rate or variable and many credit brokerages will offer a choice from the 3 from a wide range of lenders. You should also factor in broker and lender fees and any other charges that may be applied before deciding which loan option is best for your circumstances.

Who might consider a secured BTL loan?

The secured buy to let loan is the fastest way to release equity while avoiding the cost of renegotiating your first charge mortgage terms. As there are no limits to how you spend this equity, it can be put to multiple uses including refurbishing current properties, paying off a buy to let mortgage early or even purchasing a new property to add to your portfolio. As BTL loans are non-regulated they can also be completed and funds issued much faster than first charge lenders for applicants who need money in a hurry.

Landlords may choose a secured buy to let loan over a mortgage for a number of reasons including:

• Difficulty accessing or declined a BTL mortgage from a mainstream lender
• Requiring an LTV of up to 75% of a property’s value
• Most credit profiles are acceptable, including CCJ’s and defaults
• When not wishing to change their first charge mortgage due to favourable rates

The secured buy to let loan is usually easier to access than a second mortgage and may be preferable to a remortgage option, especially if you have excellent rates from your current provider you want to hold on to.

Before making any new financial commitment, you should always speak to a trusted financial advisor to ensure that you fully understand what the options are for your particular circumstances. This is especially true in this instance, where secured buy to let loans are often unique to you, the landlord.

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