Any mortgage advisors out there?(5 Posts)
Myself and my DP can't afford to buy in the area we live in, and due to both of us being in low wage jobs it will take forever for us to get a big enough deposit. We have £15k saved. We are wanting to buy a small flat and then rent it out so that our saving are not just sat in the bank depreciating in value.
We want to book an appointment with a mortgage advisor but don't know if they can help. We can't go strait to a buy let mortgage as the deposit needed is a huge percentage. Will they be able to advise us knowing that we are going for a personal mortgage only to change it over to buy to let ASAP?
How long do you need to wait before transferring to a buy to let?
Buy to Let can be quite a risky investment type and it doesn't sound as if you can afford to take very high risks with your hard earned savings. There are other, lower risk ways of making your money work harder for you for a few years.
Buy to Let interest rates are higher than residential mortgages so you'd need to be able to prove affordability at the higher level.
i have found the opposite to the other poster, whilst the interest is higher, the affordability is done on the properties considered 'rentability' rather than your income. so whilst i have no income i have a by to let mortgage cos my flat is rentable.
however you need to consider the return, and how you will cover any months it is not rented and whether u can afford the upkeep that comes with a property. i was very fortunate to rent mine for way over my original mortgage repayment so i could quickly save move in case i needed it for empty months and upkeep. i bought new to minimise this but have family support to pay for things if it all went tits up, which it didn't but it's good to have a safety net. u can get agents that will manage the property and cover any empty months rent. they are extortionate imo and u would need to factor that in if u needed that security. if not u need to hold back at least 3months mortgage payments from your saving to give yourself a buffer imo.
i have a wicked awesome mortgage advisor who does all this for me tho, and the right one will save you more than what they'll cost you. she covered all this with me and negotiated me great rates i'd never have got by just applying at a bank or whatever.
Sorry, sunseed is right. Buy to let mortgages are only based on rental income if you are not a first time buyer, and already own your own home. If you are renting and want to buy to let, then you are assessed on your salary and income, not the rental income.
Anyway, that is irrelevant as it is illegal to let out a property without informing your mortgage lender, and if you have got a personal mortgage at a first time buyer rate they certainly won't approve of you letting out the property.
You need to save up more or invest in something else. Even for a £100k flat you would need to have saved £35k to cover the deposit, stamp duty and fees.
I think I'd advise against a buy to let in your position. If you're not earning very much, how easy would you find it if suddenly the boiler went in the rental flat and you needed to fork out 2k for a replacement? Or had a dodgy tenant who didn't pay? Saving accounts are rubbish but have a look at the Lifetime ISA coming in in April - the government will add 20% extra to the money you put in and you can use it for a deposit. Or invest in a mixed fund through an ISA. Any money made will be tax free.
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