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Original poster

is it possible to get a mortgage based on Buy-to-Let income on a place owned outright?

13 replies

likeatonneofbricks · 07/06/2012 19:06

if a person has no regular income from a job (studying/ irregular income/retired with small income)? The Buy-to let would be around 1200pm and the place is in the popular area which will always be easy to let. BUT theoretically tenants might default or need to be evicted (unlikely but mortgage companies could consider all negative outcomes?). If it is possible would they consider a small deposit (and how much proportionately)? sorry these might be very naive questions.

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ThisisaSignofthetimes · 07/06/2012 19:15

you might struggle getting more than an 85% LTV. The higher the LTV the higher the interest rate and you will be expected to show that you can cover the interest payments plus around an extra 25% or so. I would google buy to let mortgages, there are alot of comparison sites. You also need to consider how you would meet maintenance costs, e.g. New boiler if it goes, plus insurance and letting agent fees if you are not going to find tenants and manage the property yourself.

Original poster
likeatonneofbricks · 07/06/2012 20:58

just to clarify - it's not a buy to let mortgage. The place that is owned outright would be bringing the income as a buy to let (1200), the mortgage would be on a new place. There would be money from savings to cover for maintenance etc. I'm essentially asking whether a property that's let out can be seen as regular income by mortgage co's (instead of salary - logically how reliable are they in the current climate with redundancies?) and a basis to grant a mortgage.

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Original poster
likeatonneofbricks · 08/06/2012 10:25

is this too unusual, as no more replies?

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Original poster
likeatonneofbricks · 09/06/2012 11:16
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ThisisaSignofthetimes · 09/06/2012 16:45

Hi, understand what you mean now. The income from the buy to let would be treated as investment income and I doubt that a lender would be that generous with what they would be prepared to lend. I would speak to a mortgage broker if I were you and be prepared for any loan offered to be on a pretty high interest rate as you would be seen as a bigger risk.

Hullygully · 09/06/2012 17:01

you mean a let-to-buy then.

crazyhead · 09/06/2012 17:08

I don't know quite how they'd treat it as income, but for tax purposes, wouldn't you be better off getting a BTL mortgage on the place owned outright, and then buying your new place nearly outright?

Basically, BTL mortgages aren't based on income and residential are, so that might be more likely.

DelGirl · 09/06/2012 17:45

I am in this position and am trying for a btl mortgage on a place I already own, place already rented out and have asked for approx 70% , agreed in principle ages ago but now they are dragging their heels on the offer, been waiting for e ver Hmm. Mine is complicated by the fact that the property is in the uk, I live in Italy and don't work! Best of luck, i'm sure it is possible but not without patience. I have heard of people in better positions than me struggling to get anyone to lend these days.

Original poster
likeatonneofbricks · 09/06/2012 23:23

thank you, glad to see some replies!
crazyhead I didn't know that btl mortgages aren't based on income! you mean you can ask for it on the place you already have (with no mortgage)? I'm also not sure how can I then buy a new place outright?? the thing is I have no clue about mortgages and how they work - so if you get a btl they give you big sum of cash almost equal to the value??
DelGirl - well you aer still a UK citizen though, not sure living in Italy matters too much, but lack of regular income of course they never like, can you not ask why the delay? is this a big company or a 'niche' one?
ThisIs, and anyone who knows, what companies are worth speaking to, the more flexible ones?

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caramelwaffle · 09/06/2012 23:27

Hullygully is correct; it is Let to Buy you are considering - not Buy to Let: It is possible, yes. You need to speak with independent Mortgage advisors or IFAs.

Original poster
likeatonneofbricks · 09/06/2012 23:30

caramel, thanks, I didn't know there was such a term - but what i meant is that the place I already own would be a buy to let, and the new one mortgaged, I wanted to stress the source of income for the possible new mortgage by mentioning BTL.
Can you recommend any?

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DelGirl · 09/06/2012 23:31

I think banks etc are just not keen to lend anything at the moment, lots of people I've spoken to have said the same. They want a pint of blood and then some.#

Try Handelsbanken, charcol, Ipswich B.S

caramelwaffle · 09/06/2012 23:38

I think DelGirl has that right.

And some good suggestions to start.

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