100% Offset Mortgage?

Spikey_2 · 12 June 2005 at 8:51PM

Hi all you experts on MSE.

I need your help more then ever.

Thinking of buying a house as a 'Buy to let' (student let) and need to raise all the purchase price.

I have seen a place for £111000 and I am very interested.

Therefore I need to find a company that will give me a 100% Mortgage.

Can anyone suggest where I can go who will give me the best deal.

Any help appreciated.

Thanks in advance.

Spikey

debtbuster2K5 · 12 June 2005 at 9:01PM

Hi Spikey,

I am no expert, but what are you reasons for buying the house. Is it for capital growth or Monthly Income (Rent)?

Its just that assuming the best BTL mortgage rate you can get is say 5% (Probably more), once you take into account void periods, repairs, maintenance etc is your yield likely to be anymore?

Therefore, you would do better to put money into a high interest savings account, where there is no risk, no hassle.

I may have the wrong end of the stick, but I always thought for BTL to be a succesful investment you would need to fund at least 25% with your own money

Or do you have savings tucked away that you wish to offset?

Regards

Spikey_2 · 12 June 2005 at 9:06PM

debtbuster2K5 wrote:

Hi Spikey,

I am no expert, but what are you reasons for buying the house. Is it for capital growth or Monthly Income (Rent)?

Its just that assuming the best BTL mortgage rate you can get is say 5% (Probably more), once you take into account void periods, repairs, maintenance etc is your yield likely to be anymore?

Therefore, you would do better to put money into a high interest savings account, where there is no risk, no hassle.

I may have the wrong end of the stick, but I always thought for BTL to be a succesful investment you would need to fund at least 25% with your own money

Regards

Hi, Thanks for your reply,

My reasons are to build a secure long term future for my family and also due to my contacts I will have assured students for as long as I want. Therefore I will have a def income near to £1000 a month.

Unfortuantely, I can only invest about £4000 of my own money and therefore looking at a near 100% offset Mortgage.

I hope that makes sense.

Spikey

Ps. I would also appreciate some names of companies etc etc.

herbiesjp · 12 June 2005 at 9:08PM

You will not get a 100% mortgage on a BTL deal

Spikey_2 · 12 June 2005 at 9:15PM

herbiesjp wrote:

You will not get a 100% mortgage on a BTL deal

then what are my options?

Spikey ???

nrsql · 12 June 2005 at 9:18PM

>> I always thought for BTL to be a succesful investment you would need to fund at least 25% with your own money
Nope - best are those which use none of your own money (especially if you don't have a large cash pot) - but it needs carefull structuring to achieve.
Still have to look at the figures to decide if it's viable but if you can finance the debt with the rent it means everything is income with no outlay. If you try this with no financial backing though it is very risky as anything that goes wrong (bad tenant, repairs, empty property) can leave you needing to take out an expensive loan to cover it.

debtbuster2K5 · 12 June 2005 at 9:18PM

Hi

Not really sure of the options available to you other than saving around £22k for a deposit

Sorry I cant be any more helpful

Regards

Spikey_2 · 12 June 2005 at 9:20PM

nrsql wrote:

>> I always thought for BTL to be a succesful investment you would need to fund at least 25% with your own money
Nope - best are those which use none of your own money (especially if you don't have a large cash pot) - but it needs carefull structuring to achieve.
Still have to look at the figures to decide if it's viable but if you can finance the debt with the rent it means everything is income with no outlay. If you try this with no financial backing though it is very risky as anything that goes wrong (bad tenant, repairs, empty property) can leave you needing to take out an expensive loan to cover it.

The students are vetted before they come to me and will be on 12 month contracts.... so how do I go about this?

I feel the risk is too good to pass by and so need help in getting the finances.

Please help someone.

Spikey

Spikey_2 · 12 June 2005 at 9:22PM

debtbuster2K5 wrote:

Hi

Not really sure of the options available to you other than saving around £22k for a deposit

Sorry I cant be any more helpful

Regards

Thanks anyways.... If I had £22k then life would def be alot easier.

Spikey

meanmachine_2 · 12 June 2005 at 9:29PM

You can't get a BTL mortgage on 100% and even a 75% mortgage is a very high risk.

Forget it and save your money.

What's the rental yield by the way?

Investments are made by people who have money. Using debt to finance more debt is crazy.

Just my opinion, of course.

Buy-to-let used to be available only to those prepared to take out a commercial loan. Not so long ago a 10% yield was seen as the bare minimum.

EDIT: In London a £200K property will possibly yield £1000pcm - maximum. A £100K property will yield around £500pcm.

Unless the property you've seen is 50% BMV I'd say your plans don't add up.

But maybe if you post more details...

Spikey_2 · 12 June 2005 at 9:32PM

meanmachine wrote:

You can't get a BTL mortgage on 100% and even a 75% mortgage is a very high risk.

Forget it and save your money.

What's the rental yield by the way?

Investments are made by people who have money. Using debt to finance more debt is crazy.

Just my opinion, of course.

Buy-to-let used to be available only to those prepared to take out a commercial loan. Not so long ago a 10% yield was seen as the bare minimum.

Thank you for your advice.

I feel very strongly that I can make a go of this and need to find out where and how I can get the finances to do this.

Initially I know that the rental income will more then cover the mortgage payments and therefore the risk is acceptable.

Any further advice?

Spikey

100% Offset Mortgage?

Comments

Confirm your email address to Create Threads and Reply

🚀 Getting Started

Categories

Is this how you want to be seen?

Get our FREE Weekly email full of deals & guides - and it’s spam-free