Buy-to-let landlords have been warned that they may not currently have the best mortgage deal to match their requirements. In addition, many are locked into mortgages with high standard variable rates, due to negligence from bad brokers.
The Mortgage Broker Ltd suggests that some landlords are missing out on good mortgage deals due to working with unprofessional brokers. These will only use familiar lenders, rather than searching around for the best deal possible for the landlord.
Darren Pescod, Managing Director of The Mortgage Broker Ltd, observed: ‘We have seen evidence of mortgage brokers securing mortgages for investment properties, which are then inhabited by family members. Or they have arranged a mortgage for an investment property, that is either a multi-let, Airbnb or student accommodation, without informing the lender.’
‘This is highly unprofessional. If a lender finds out, it could withdraw the mortgage and in a worst case scenario, the client could be slapped with mortgage fraud, which will severely affect their ability to borrow funds, or obtain mortgages in the future. Some landlords don’t understand the severity of a little white lie to the lender, or understand the implications of not divulging their full intentions with the property, or their personal situation. Lenders are more geared up now to do post application checks and are on the lookout for scheme abuse and mortgage fraud,’ he continued.
Mr Pescod feels that landlords however do not need to feel trapped by so-called lazy brokers. He said that they, ‘can often make changes to their mortgage arrangements with the help of a reputable, experienced and professional broker.’
‘There are some great buy-to-let mortgage deals around at the moment, such as lenders still willing to offer a mortgage at 125% of the pay rate, rather than the recent increase in rental calculations, made my most lenders,’ he concluded.