With a new year upon us, we consider the top five things to do in order to maximise your property portfolio and mortgages in 2017:
- Revisit the term of your capital and interest mortgage
By decreasing the number of years over which you repay your mortgage, you will massively reduce the interest you pay over the entire term. If you can afford to pay more per month now, it will pay dividends in the long run.
- Borrow more
With interest rates currently so low, consider borrowing more and increasing your mortgage – providing you have enough equity and income to afford to – investing the released equity into something that produces a higher return. For example, you could purchase a rental flat in Mallorca – where the property market is booming – and let it out via Airbnb, or invest in the stock market. However, always take tax and financial advice when considering investments.
- Tidy up your buy to let mortgages
We have been warning of the changes to buy to let mortgages for quite some time; borrowing is harder at higher loan to value (LTV) and you won’t be able to borrow as much you used to. There is still time to maximise your buy to let portfolio, though, just look at longer term products and take the right advice.
- Incorporate your buy to let portfolio into a limited company
The upcoming changes to tax are viewed as penalising landlords and make entering the rental market as a private investor less attractive. Interest rates are just as competitive as they would be if you were buying in a personal name, so incorporating your rental properties into a limited company can be beneficial – not to mention tax efficient. However, this is a specialist area which needs expert advice and direction so make sure you speak to a broker who can guide you through this process.
- Keep an eye on mortgage rates
If your mortgage is coming to an end this year, keep an eye on mortgage rates to ensure you are getting the best deal when you refinance. For instance, inflation is set to increase which may have a knock on effect for borrowers, and the market will undoubtedly see fluctuations. As such, it’s important to speak to a broker who knows the latest rates and can help you in making the most of your money, regardless of changes to the property market.