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  • FIRST POST
    • Panky123
    • By Panky123 13th Jan 18, 11:08 PM
    • 3Posts
    • 0Thanks
    Panky123
    Interest free mortgage help...
    • #1
    • 13th Jan 18, 11:08 PM
    Interest free mortgage help... 13th Jan 18 at 11:08 PM
    OK so I am completely naive when it comes to mortgages and houses etc. So was hoping someone here could help me with some advise...
    OK, so my idea was to possibly get an interest free mortgage on a 1 bed flat of around £90k, putting down £20k deposit, would I possibly be able to rent this out straight away so that the rent being paid will cover the mortgage and some. Also in 5 years down the line or whatever I'd be able to sell it, depending on where the market is at the time I could make a few grand maybe...
    As I said I have no idea what I'm talking about so in theory it sounds really easy and plausible to do however I know I'm gunna be missing something important that won't allow me to do this lol so was hoping someone here could shed some light on this...
    Thanks in advance
Page 1
    • worried jim
    • By worried jim 13th Jan 18, 11:10 PM
    • 8,876 Posts
    • 13,589 Thanks
    worried jim
    • #2
    • 13th Jan 18, 11:10 PM
    • #2
    • 13th Jan 18, 11:10 PM
    Let me know where you are getting an interest free mortgage from, I’ll have two!
    "Only two things are infinite-the universe and human stupidity, and I'm not so sure about the universe"
    Albert Einstein
    • Thrugelmir
    • By Thrugelmir 13th Jan 18, 11:18 PM
    • 56,845 Posts
    • 50,192 Thanks
    Thrugelmir
    • #3
    • 13th Jan 18, 11:18 PM
    • #3
    • 13th Jan 18, 11:18 PM
    As I said I have no idea what I'm talking about so in theory it sounds really easy
    Originally posted by Panky123
    Start on the House Buying, Renting and Selling board then. Learn what running a business involves. As well as the tax implications.
    “Opportunities come infrequently. When it rains gold, put out the bucket, not the thimble”
    ― Warren Buffett
    • alex_163163
    • By alex_163163 14th Jan 18, 9:00 AM
    • 216 Posts
    • 145 Thanks
    alex_163163
    • #4
    • 14th Jan 18, 9:00 AM
    • #4
    • 14th Jan 18, 9:00 AM
    I think it’s gonna be a lot harder than you think it is!
    I’m not a landlord myself, and have no interest is being one for that matter, but I’ve picked up a few points from these boards on the matter, so as above - head over to the buy, selling and renting board, lots to learn there.

    Some points to consider in a nutshell:
    - as you say you are naive about it all, I will assume you are a FTB? FTBs getting a BTL mortgage is rare. Usually lenders only offer BTL mortgage to existing home owners I believe.
    - even if you could get one, think you might be a bit short on deposit - advice on here usually is you need a 75% LTV ratio. Based on your figures, you’re at 22%.
    - you might make money when you come to sell in a few years time, but you’ll have CGT to pay.
    - do you know/ understand any of the rules and responsibilities of being a landlord?
    - rent - you’ll have to pay tax on this income. You’ll need to use some of the ‘profit’ for property maintenance so won’t all be profit.

    lots you need to research!
    • Edi81
    • By Edi81 14th Jan 18, 9:04 AM
    • 358 Posts
    • 232 Thanks
    Edi81
    • #5
    • 14th Jan 18, 9:04 AM
    • #5
    • 14th Jan 18, 9:04 AM
    Interest free mortgage

    You really are naive! As others have said read the forums for a bit and realise that this is not an easy way to make money.
    • ACG
    • By ACG 14th Jan 18, 10:26 AM
    • 16,135 Posts
    • 8,312 Thanks
    ACG
    • #6
    • 14th Jan 18, 10:26 AM
    • #6
    • 14th Jan 18, 10:26 AM
    I think you mean interest only rather than interest free.

    You can get what is called a Buy to let mortgage which does exactly what it says, it allows you to buy a property in order to let it out.

    The rent would need to be sufficient in the eyes of the lender and they all have similar but slightly different rental calculations thy work off.

    The rules and stance on tax has changed recently on BTLs so you should really read up on them.

    Lastly, not many lenders will allow you to take out a BTL mortgage when you are not a homeowner, so your options there will be very limited. You will need a broker.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Panky123
    • By Panky123 17th Jan 18, 9:16 PM
    • 3 Posts
    • 0 Thanks
    Panky123
    • #7
    • 17th Jan 18, 9:16 PM
    • #7
    • 17th Jan 18, 9:16 PM
    Cheers for the responses for the most part, obviously I did mean interest only not interest free so yeah cheers for the everyone that found that amusing ��
    I have just been going through ideas on how to invest my money other than a savings account die to the extremely poor interest rate they offer but I guess by the sounds of things I will have to go back to the drawing board
    • amnblog
    • By amnblog 18th Jan 18, 8:21 AM
    • 10,180 Posts
    • 3,980 Thanks
    amnblog
    • #8
    • 18th Jan 18, 8:21 AM
    • #8
    • 18th Jan 18, 8:21 AM
    Cheers for the responses for the most part, obviously I did mean interest only not interest free so yeah cheers for the everyone that found that amusing ��
    I have just been going through ideas on how to invest my money other than a savings account die to the extremely poor interest rate they offer but I guess by the sounds of things I will have to go back to the drawing board
    Originally posted by Panky123
    There are a number of ways to invest your money in assets rather than leave them on deposit. Buy to Let property is among the most complex.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
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