Need advice on if i can buy to let!

redpin_2

can i ask if anyone can shed any light on/help me on whether i'd stand a chance getting a buy to let mortgage, more specifically would my earnings be enough.

personal situation

• earning: 22k, maximum can put aside for mortgage is £1100 per month after other expenses
• aged: 20

• deposit: £13k (£17k saved up but assuming i will need 4k spare for stuff)
• mortgage required: 100k mortgage for studio flat (£87k after deposit )
• desired mortgage term: want to pay it off in 7-10 years

as you can see i was planning to just save up until ive got 100k but i can see a property which looks to be a really good investment; for the same value im planning to save up

thanks

redpin_2

looks like my salary will be the biggest issue, kinda sucks. is the requirements as stingent for normal mortgages?

No chance
Halifax: Minimum 25k per year & 25% deposit (Halifax BTL Requirements)
C&G / Loyds TSB: Minimum 35k per year & 25% deposit (C&C BTL Requirements)
HSBC: Minimum 25k + per year & 40% deposit (HSBC BTL Requirements)

Some chance
Barclays: Minimum 20k per year but a 40% deposit (Barclays BTL Requirements)

LenanMayers

You right about saving until you have 100k that's a good budget to start at

CloudCuckooLand

25% deposit is common for BTL.

10% is normal for normal residential purchase.

A 25% deposit would reduce the balance needed to £75k, making your salary less of an issue...how long will it take to save the extra £12k...?

A 40% deposit would make salary even less of a problem, but how long would it take to save £27k extra..?

redpin_2

thanks guys would take me about 10 months to get 12k, by then id imagine the property i got my eye on wont be there anymore.

ive got a backup option which is to go 50/50 with my dad's m8 (if he's up for it). hes only interested in making a fast buck over a period of 5 years, but in doing so i wont be paying much into it and it'll give me the opportunity to save up and possibly buy his share when the time comes or use the profit and savings to buy something else. it'll also decrease the burden on me, which will be nice i hope he's still up for it, and that i get the property.

thanks

redpin_2

that option's fell through as he doesnt want to do it as hes unsure about his job stability

Thrugelmir

desired mortgage term: want to pay it off in 7-10 years

How would manage to do this?

redpin_2

do it interest only (£500 per month), which would be paid through having a tenant.
at the same time i'd save up, £1000 x 13 (£13,000) / £87000 mortgage after interest = just under 7 years
that way i'd secure the house at the price i wanted to pay

the other way is via a mortgage (none tenancy) which would take 10 years at 6.9%

regards

CloudCuckooLand

Saving £13k out of less than £18k take home, doesn't sound like a normal 20-yr old !

Its great to have ambition, goals and a good saving habit, but imo you might want to consider the balance.

A girlfriend coming along will want to be taken out on nights out in a nice car etc...

Mutton_Geoff

desired mortgage term: want to pay it off in 7-10 years

Why would you want to pay down the mortgage on a BTL thus exposing you to higher and higher taxation each year?

Surely it's better to save the surplus (or reinvest) than pay off a loan secured on a let property when the interest on that loan is of benefit to your accounting?

p00hsticks

redpin wrote: »

looks like my salary will be the biggest issue, kinda sucks. is the requirements as stingent for normal mortgages?

No chance
Halifax: Minimum 25k per year & 25% deposit (Halifax BTL Requirements)

I think you may be mis-reading/misd-interpreting this. It states that the minimum INCOME required is £25k - so I suspect that would include the rental income you would be getting from the BTL, not just any salary you earn from employment.