Do you think I can buy this house?

trumpton

I can't see you getting a mortgage on the figures you've given. I would estimate you will need a 25% deposit on the house you want to buy. We moved without selling the first and the BS was less interested in how much equity was in the first property, more interested in LTV of 75% on the second to cover their back when/if prices go down. It's not so much about affordability anymore.

I know you say you have worked hard to get the BTL's, but 3 mortgages is a lot to juggle in the current climate. How long could you manage them if interest rates go up a few percent? In the days of the housing boom I would have said hang on to them, but now I would say sell them and buy a family home. Or keep renting.

edit: when our house was on the market for £200k, we had a mortgage of £5k on it. We still had to find a £60k+ deposit on the second house.

mpg

With house prices varying so much up and down the country. The op may have 2 £100k houses that he rents out for X amount that covers both interest and capital repayments.

He then rents a £800 pm house worth £260k which is nice and big large garden decking massive kitchen ETC.

Nothing wrong in trying to better yourself.

It annoys me when people say they have no sympathy for BTL. Why because they are trying to better their lives and those of their families.

Its like saying i have no sympathy for people who go out to work. Its their fault there aint enough jobs to go round.

If the OP landord want to sell the house/home that the op is living in now and I assume he likes it. then its in the OP's interest to be the buyer.

I have no sympathy for people who dont take any risk in life and grumble that life isnt fair.

Thrugelmir

mpg wrote: »

With house prices varying so much up and down the country. The op may have 2 £100k houses that he rents out for X amount that covers both interest and capital repayments.

He then rents a £800 pm house worth £260k which is nice and big large garden decking massive kitchen ETC.

Nothing wrong in trying to better yourself.

It annoys me when people say they have no sympathy for BTL. Why because they are trying to better their lives and those of their families.

Its like saying i have no sympathy for people who go out to work. Its their fault there aint enough jobs to go round.

If the OP landord want to sell the house/home that the op is living in now and I assume he likes it. then its in the OP's interest to be the buyer.

I have no sympathy for people who dont take any risk in life and grumble that life isnt fair.

There's no risk when speculation is based on borrowed money.

The more recent BTL model is built on capital appreciation, interest only mortgages being the norm. As net rental income after tax would not be sufficent to repay the capital debt.

Catblue

mpg wrote: »

Nothing wrong in trying to better yourself.

It annoys me when people say they have no sympathy for BTL. Why because they are trying to better their lives and those of their families.

I could see your point if the OP had purchased any of the houses with his own money earned by his own hand. However, he is in £100Ks of debt already and is talking about taking on more £100Ks of debt.

How is being in £100Ks of debt bettering yourself? Saddling yourself and your family with so much debt is a real risk to your future. And if it does work, then you've priced your own children out of the housing market (but that's okay because you've bettered yourself at the expense of your own children).

And do you then have the same hopes for your own children when they are adults? Do you lie in bed hoping that your children are half a million pounds in debt when they are adults? Presumably so, because that means that they are bettering themselves.

Strange these days that being in so much debt is not even considered shameful any more - it is positively admired in some quarters. And even stranger is that some parents even want it for their own children.

mpg

Looking to the future If you were to purchase a house NOW on a 25 yr Interest only mortgage and rented it out and in 24 yrs time sold said property then that would clear capitol and leave a nice excess.

There is no way that house prices will be less in 25 yrs time than they are today

Or the same but with Capitol and repayment and in 25 yrs time your tennant has paid for your house.(nice little retirement fund)

When my parents bought their first house for £2500 I'm sure the thought of their children buying a house for £200'000 would blow their mind but thats what has happened 30 yrs on.

If my kids can afford to get themselves into £1/2 million then its not a problem. its the NOT being able to afford that debt when it becomes a problem.

If my kids earn £400k per year then £500k mortgage is not an issue.

I know what being poor is like I have lived in a car for months in the past. Only a few years ago i was down to my last £2. I'm comfortable now and have savings.

I'm also in the process of costing a BTL property that i can rent to my sister and her boyfriend. I wont make any money on the BTL however they will pay for my mortgage for the first few years.

mpg

There are lots of businesses that base their models on acquisitions, and they are doing very well.

The problem with doing that in the housing market is that the general public are trying to compete and cant so complain.

Catblue

mpg wrote: »

If my kids can afford to get themselves into £1/2 million then its not a problem. its the NOT being able to afford that debt when it becomes a problem.

Your post is really telling. We seem to have some people who are wishing crushing debt onto their own children - and being proud of the fact.

Life is so difficult for young people now, compared to when I was younger - costly further education, an unstable job market, poor pension provision, expensive housing costs.

And the people to blame for this situation? Their own parents (either directly or through the people that their parents chose to elect).

I am a bit of a cynic but even I am taken aback that Thatcher's children (most of them now parents themselves) are making their own children pay for their greed. And it seems like some of these parents are happy to do so, even proud of doing so.

Heartbreaking really.

Arthritic_Toe

mpg wrote: »

Looking to the future If you were to purchase a house NOW on a 25 yr Interest only mortgage and rented it out and in 24 yrs time sold said property then that would clear capitol and leave a nice excess.

There is no way that house prices will be less in 25 yrs time than they are today

Or the same but with Capitol and repayment and in 25 yrs time your tennant has paid for your house.(nice little retirement fund)

Yeah but they haven't, because in the OP's case you will only get 800 per month in rent, but the repayment mortgage will cost you 1500 a month. There may be more profitable ways to invest the additional 700 that will deliver a better return. Many people have dived into BTL without doing the maths.

Fly_Baby

Catblue wrote: »

Your post is really telling. We seem to have some people who are wishing crushing debt onto their own children - and being proud of the fact.

Life is so difficult for young people now, compared to when I was younger - costly further education, an unstable job market, poor pension provision, expensive housing costs.

And the people to blame for this situation? Their own parents (either directly or through the people that their parents chose to elect).

I am a bit of a cynic but even I am taken aback that Thatcher's children (most of them now parents themselves) are making their own children pay for their greed. And it seems like some of these parents are happy to do so, even proud of doing so.

Heartbreaking really.

I agree with what you are saying but the BTL-ers are not exactly crushing debt onto THEIR children. Because their children will either inherit that BTL or might even get it as a free/cheap house to live when they are ready to move out.

So BTL-ers are essentially helping their own children.

mpg

Woah slow down. I never mentioned crushing debt as a good thing. Its all about moderation.

Believe me I would rather have bought my house 7 yrs ago when it was only £70k but i wasnt in a position to buy 7 years ago.

I understand where your coming from and your right that debt seems to be socially accepted nowadays. The only debt i have is my mortgage. I am in a position where i either pay a big chunk off my mortgage or put a size able deposit down on a BTL. I have a tennant lined up that will cover all costs. But i could afford it regardless of being let or not. Mortgage debt is different to credit card debt. BTL Is a business acquisition.