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Original poster

Buy to Let Mortgage

17 replies

WelshBoris · 14/01/2007 20:19

Brief History-

Split with DDs dad when pregnant, didnt put any money into the house, couldnt prove I gave him money towards bills etc so left with nothing.
Took a lovely council house, 2 bedrooms, right area, local ammenities etc.

Present Situation-

Can buy the house under the council Right to Buy scheme. Worth 90K, I can have it for about 57K. Boyfriend owns his house out right, so the plan is to move in with him and rent my house out.

Problems-

I work part time, will I be able to get a mortgage, even a buy to let one?

Have no money so cant afford any fees etc, can I have more money on top of the mortgage to cover that?

Could I let a letting company rent the house out for me, paying a fee, but still leaving enough to cover the mortgage?

End Result-

In 5 years I can sell, making a good profit. Or keep renting it out if I'm more financially secure

Thank you for reading, those at the back wake up

OP posts:

Skribble · 14/01/2007 20:22

I like the fact with buy to let you still have the property at the end of it to sell.

Most buy to let look far about 20% min deposit, I was considering it but for holiday lets but not able to get enough deposit for a decent enough place.

Skyler · 14/01/2007 20:25

I think you usually need a big deposit for buy to lets. Sorry. I could be wrong though. Hope someone comes up with a solution. It would be great for you.

Original poster

WelshBoris · 14/01/2007 20:27

My house is lovely, right opposite loads of shops, park on the same road, a creche. In walking distance of a good school and bus ride away from a great one.
10 min bus ride into Swansea centre.

I'e got an appointment with a mortgage geezer my Daddy knows on Friday.My father says if push comes to shove he'll buy it but he wants me to work for my money

I'm going to the local estate agents first, ask them how much I'll get per week for it then show it to the mortgage man.

OP posts:

Skyler · 14/01/2007 20:27

We bought our old house and had to let it out at a later date. We had to advise the mortgage company and pay an annual fee but as we had lived in the house 12 months this was all ok so there could be a way round it if you can wait to move in with your boyf??

Original poster

WelshBoris · 14/01/2007 20:29

Yeah I can wait, but we were hoping to TTC in September.

I can get the deposit, but I was hoping I wouldnt have to go cap in hand to Daddy.

OP posts:

Skribble · 14/01/2007 20:38

Agent should be able to give a good idea of rental potential and how rentable it is IYSWIM. If it will be let easily and you can cover the %20 deposit then sounds good. Would be a good idea to ensure you have enough money to cover a few months mortgage until you get a tenat and during future change oversof tenants.

Some advice

Mortgages from Landlord Morgages , Their site .

Carmenere · 14/01/2007 20:40

Do you have decent credit rating, by that I mean have you borrowed money and paid it back as this is what they want to know(ie that you have a responsible attitude and proven record). Perhaps your dad could lend you the deposit.

Good idea to get a quote from the rental agents. Do your sums before going to meet the mortgage bloke, have it written down and they will realise you are serious and have thought about it properly. Good luck, I'm really envious as I had an oppertunity to buy property at your age and diddn't want to. If I had done I would be sorted for life now.

LIZS · 14/01/2007 20:41

Are there conditions attached to the Right to Buy ie. you personally have to live in it yourself for x years ? You would normally need a deposit for Buy to Let loans but, assuming you are permitted to let it , your Loan to Value may satisfy them enough secuity wise to enable you to borrow more than 57k . However , you would be liable for income tax on any rental income (net of maintenance costs, agent fees (between 5 and 15% rent) and mortgage interest) and ,if you buy now and don't live there as your principal private residence it, you may well fall into Capital Gains Tax territory should you subsequently sell and your liable "gain" could be higher than any market rises as you would be buying at less than current market value. hth

UCM · 14/01/2007 20:43

With btl, they won't normally lend more than 75% of the propertys worth. In this case you are only asking for (57 as a percentage of 90, sorry pregnancy brain) but it's less than 75%, so you should be fine.

The other problem you may encounter is that if it's right to buy there will be stipulations on whether you can rent it out within the first xx years so may not get a btl mortage as they normally ask that you live in it for xx years. So you may be better off buying it with a normal mortgage, then renting it out privately.

UCM · 14/01/2007 20:43

BTW I would sell my arse to make sure I bought at this price

Original poster

WelshBoris · 14/01/2007 20:45

My best friend in the whole wide world owns shed loads of houses and pubs so will help me write everything I need to know down before I meet the mortgage man.

He would be willing to buy the house if I cant get the mortgage, but that's no good to me.

It is a great opportunity Carmenere, and something good will come out of splitting up with DDs dad. Apart from meeting the lovely Nigel of course

Just thought I'd sound out MN first before I wade in head first

OP posts:

Original poster

WelshBoris · 14/01/2007 20:48

All sounds very complicated

I know about the Right to Buy bit though LIZS, you cant sell it until 5 years has passed.

The rest, I havent a scooby, but sorting this out is my plan for 2007

OP posts:

LIZS · 14/01/2007 20:48

UCM you still have to ask your mortgage lenders permission to rent out the property(as they normally have first charge on it) and some would insist on transferring it to a Buy to Let anyway.

LIZS · 14/01/2007 20:56

Own it or live in it yourself for 5 years ?

elliot3 · 14/01/2007 21:07

mortgage express for buy to let mortgages - look online and you can see some figures - yuo'd want an interest only mortgage, lower mothly payements and look at rightmove under renting for properties in your area and see what kind of rents around you - good luck, sounds too good to miss

sarkin · 15/01/2007 10:30

Hi WelshBoris
with rtb it is possible to raise more than the purchase price if the money is for home improvements.

You will need money for solicitors cost and valuation

You cannot convert to BTL. Why dont you and your boyfriend move into the council property and rent his out as you may get a higher rental return.

For BTL you need minimum 10% deposit with rental yield of 110% but it depends on the lender and credit score.

If you need any more advice Click here put some contact details in and I will get some quotes for you

Original poster

WelshBoris · 15/01/2007 18:23

My house is only 2 bedroom and we are hoping to TTC in September so need 3 bedrooms as he has a daughter who stays during the week.

Thanks for all your advice though, I'm a bit more prepared for my meeting now

OP posts:

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