We all want to save money on all the possible fees and interests that we are paying for different things. Landlords are usually the ones that are trying different methods to reach that goal the most. Renting property certainly can be profitable. More precisely, it is one of the favorite passive income methods of many! But, the fees and interests the mortgages bring usually reduce the amount of money we make this way.
So, what to do? There is no such thing as a free buy-to-let mortgage. However, with some great decisions and moves, you can spend less money on them. Because of that, let’s see together how to save money on interests and fees with the right buy-to-let mortgage.
Hiring an Expert Is a Good Option
Well, if you are a complete newbie in this area, then you probably consider that every possible assistance that you can get is worth it. We 100% agree with that statement. Hiring an expert that will help you save money on the mortgage fees and interests is going to pay off. Of course, there are many “experts” online, and it can be a bit challenging to pick the one that meets you requirements and expectations to the fullest.
Our recommendation is to research the expert before you even contact it. Find out more about the experience that previous customers had, If you see that there are many positive reviews about his work, then there is no reason to hesitate. Of course, you also need to know how much money he will charge for the assistance of this type. If the price is too high, it may happen that reducing fees and interests are not going to pay off in the end.
So, which professional should you hire? Well, if you ask us, you can visit this site and find out more about the buy to let mortgage money-saving expert that truly can bring the good results. We are pretty sure you will manage to make a good agreement!
Paying the Buy to Let Earlier
Okay, this is probably logical, but people usually do not know how to do that. In general, this is the moment when the savings you have are going to become pretty valuable. If you pay the rates at once with cash, the interests and fees are going to be much lower.
But, there are certain things that we need to highlight here. In some cases, the mortgage may seem like some sort of a trap. Unfortunately, you will also find lenders that will not allow you to pay more than 10% of the entire debt at once. That is the reason why it is crucial to read carefully the contract that you are attending to sign. There should not be limits of this type, or in case they exist, they should be reasonable for every individual.
Apart from that, you already know that making money isn’t an easy option. Some people simply aren’t capable of paying the mortgage earlier. Because of that, this move may not be suitable for everyone.
But, even if you have money, it is also important that you use it in the best possible way. If you simply don’t have an idea of how to do that, then hiring an expert is going to be a much better option.
Learn More about Tax Rules
If you graduated a long time ago, then it is about time to get back the same attitude towards complicated lessons and start analyzing the tax rules. Generally speaking, these rules are regularly changing. You need to be up to date with the latest tax changes before even getting the buy to let mortgage.
Why should you do this? Well, at first glance, the fees that you will have to pay are extremely high. But, the law also gives certain benefits to different groups of landlords. Because of that, you may find something in the law that allows you to reduce the costs. Of course, some people are not familiar with this subject at all. It may sound boring, but we strongly recommend you hire a professional that can take care of this!
Learn How to Calculate the Tax
Okay, this probably won’t help you save money directly. However, it will help you make things much easier. You will know how to divide the amounts of money you have to pay for this type of mortgage better.
So, how exactly should you calculate this? Well, let’s use an example. Your monthly rental income is 2000 Pounds. On the other hand, the interest rate that you are paying on monthly basis is 500 pounds. That means your income is 24 thousand GBP per year while the interest you have to pay is 6000 Pounds.
So, what about taxes? Well, if you pay 20% tax, then you will have to pay 4800 Pounds per year. But, if you pay the tax of 40%, then you will have to pay 9600 per year. Of course, this seems pretty high, doesn’t it?
However, keep in mind that you are also paying 20% of the interest rate on the tax credit. In our case that would be 1200 GBP.
These are the latest changes and the only ones valid that landlords should know. Things were much different before the pandemic, and they drastically changed in April 2020. But, keep in mind that these may not be the only changes that you will have to deal with. That is the reason why we said that you should regularly follow the latest updates!
You Can Set Up a Limited Company
This certainly is one of the options that every individual has. You can start the limited company and get the buy to let mortgage that way. The amount of money you will need to pay per year is going to be much lower that way. However, keep in mind that you probably won’t know how to deal with all the papers and other stuff. Guess what we are suggesting – hire someone who is familiar with this subject!
We truly hope our pieces of advice will help you lower the interests and fees!
