buy to let dilemma

kelly71_2

Hi

I need help desparately as a first time buyer. Have seen a property i like which i'm planning to rent out. I spoke to a well known broker and after searching across their panel of lenders the best they can give me is a 3year fixed buy to let at 6% and the arrangement fee would work out to +£4000.00! Then after shopping around i went to my local bank and they can do a 2year fixed at 5.64% with a £1999 product fee from their own range of products. My dilemma is if i go with the bank and they decline me after application (i have no reason to believe why they would decline me as i have good credit history etc. Only things would be if surveyor had any probs with the property itself or thought the rental yield would not be enough. Sorry but i'm thinking of the possible worst case scenario!) then i'm back to sqaure one in terms of finding a mortgage but if i go with the broker if i get rejected by a lender at least they've got acess to other lenders. So basically i don't know what deal to go for!-does anyone have any suggestions?:eek:

Last thing is insurance-as buy to let i'm expected to have landlord's insurance- what about life insurance and income protection -do i need both and is there any other insurance /protection i need when taking out a mortgage?

thanks very much:D

luckyfool

With the direct lender you need to double check that they will accept a first time buyer and first time landlord on a buy to let. Most lenders do not. The broker has quoted you BM Solutions who are one of the few that do allow ftb and first time landlords . . . especially at 75%.

Gorgeous_George

Have you done the maths? Do the numbers stack up? What is your gross yield?

There may be better times to BTL.

GG

kelly71_2

Luckyfool, i've checked with the bank and they're saying they will accept me as a first time buyer and landlord on buy to let.

Gorgeous George, the monthly mortgage would work out to £1190/ month and expected rent would be £1400-1500/month

luckyfool

I doubt there will be much tax to pay. You can set off costs over and above the interest (I think you can choose to use a standard 10% if you dont want to itemise everything), and especially if there is a letting agent taking their 5-10% then there is unlikely to be more than a few hundred being taxable.