Bad Credit - buy to let?

davels

Hi

I'm a 22 year old and I made some huge financial mistakes in my past... I'm paying off my debts quickly now but they were over 40k at one point... I get paid about £35k /pa now...

I've got several defaults and will have for a number of years; is it going to be financially viable for me to buy to let?

D

nmiah786

davels wrote:

Hi

I'm a 22 year old and I made some huge financial mistakes in my past... I'm paying off my debts quickly now but they were over 40k at one point... I get paid about £35k /pa now...

I've got several defaults and will have for a number of years; is it going to be financially viable for me to buy to let?

D

Sorry from the start but this is my opinion only; why do you want to commit yourself to more debt while you are still paying off your current debt!!

ANyway, dont forget that you will need at least 15% to put down as a deposit when buying a BTL. Would it not be better if you an raise that 15% to firstly pay off your existing debts before looking at committing yourself to a BTL mortgage.

The sooner you clear your debts the sooner you can start saving for a deposit and be in a position to supplement the BTL with your income should there be any void periods in the tenancy!

The last thing you want to do is rush yourself into a BTL with existing debts and then find our that your back to square one!!!

IMHO

davels

Your humble opinion is appreciated Thank you.

I would agree too.... I just want to get myself on the ladder... but then again, to be able to do it when debt free would be a helluva lot more fulfilling

How about just generally getting a mortgage when I'm in debt and/or have a bad credit rating? How much will they generally stich me up for interest once they consider my circumstances?

nmiah786

davels wrote:

Your humble opinion is appreciated Thank you.

I would agree too.... I just want to get myself on the ladder... but then again, to be able to do it when debt free would be a helluva lot more fulfilling

How about just generally getting a mortgage when I'm in debt and/or have a bad credit rating? How much will they generally stich me up for interest once they consider my circumstances?

Best asking that in the mortgage section, there are more qualified people there who can answer your question more accurately.

But they will need a indication of how much debt you have, what price property you want to buy and what deposit you have.

AndrewSmith

Completely agree nmiah786 with your first post.

Davels

No one will 'stitch you up for interest'. The rate you are offered will reflect the risk involved by the lender in giving you the money, based on your past and current financial profile.

Never forget that no lender has an obligation to lend anything to anyone. They can turn you down or reject an application at any stage prior to exchange of contracts (yes they can even withdraw a mortgage offer if new information comes to light) without necessarily having to give you a reason. It is not their duty to lend you the money, they are simply 'Lending'.

The actual rate offered to you will depend on your current debt status, whether it has all been paid on time and up to date, and how you have conducted your finances in the last 6 years. Also, obviously, dependant upon your income and employment status and deposit situation.

Hope this helps

Andy

van_persie

davels wrote:

Hi

I'm a 22 year old and I made some huge financial mistakes in my past... I'm paying off my debts quickly now but they were over 40k at one point... I get paid about £35k /pa now...

I've got several defaults and will have for a number of years; is it going to be financially viable for me to buy to let?

D

It may be worth bearing in mind that this is possibly the riskiest time to be entering into BTL; we are at the peak of an uncertain property market. If you'd bought 5 years ago, fine. But even the most bullish forecasts expect property to make very modest gains in the near future. BTL is not the fool-proof way to make money that so many believe it to be...

lynzpower

also depends where abouts. From what I know of London, Manchester and Bournemouth/Poole there are a helluva lotta voids out there. IN London, anecdotally people are saying that they are able to barter down the rental costs quite a lot in the best areas ( your chelseas, putneys etc) as there are simply too many properties BTL. I was thinking of letting my place out, but looking at the market, its just not worth it I dont reckon

van_persie

lynzpower wrote:

also depends where abouts. From what I know of London, Manchester and Bournemouth/Poole there are a helluva lotta voids out there. IN London, anecdotally people are saying that they are able to barter down the rental costs quite a lot in the best areas ( your chelseas, putneys etc) as there are simply too many properties BTL. I was thinking of letting my place out, but looking at the market, its just not worth it I dont reckon

In a rising market, landords are generally buoyed by capital gains and can ride out voids easier. But without such gains, those voids are going to hurt...I expect a lot of BTL landlords to bail out this year for this very reason.

AndrewSmith

Just my own personal experiences,

I used to own 7 buy to let properties,each with a mortgage maximum 80%.

That number has dwindled over the last 3 -4 years down to 1, which I will keep as I will not likely get back the investment for renovation I blindly poured into the place.

Andy

lynzpower

van_persie wrote:

In a rising market, landords are generally buoyed by capital gains and can ride out voids easier. But without such gains, those voids are going to hurt...I expect a lot of BTL landlords to bail out this year for this very reason.

Yep, me too. A lot of the properties Im checking out ( to buy and live in!!) on the internet seem to be ex- BTLs. ( outer london)

richgirl

I agree with much of the above, you should pay down your debt rather than taking on more debt