Little help/advice - first time buyer

TheEffect

I'm 19 and currently working full-time, living with parents. I've planned on purchasing a property and renting it out, letting the rent pay for the mortgage (I'm guessing it's not as simple as this).

I'm earning 14k a year, saved 3k so far and hoping to have 7k by December (I'll be 20 then) for a property around 60k-70k. Am I even earning enough to purchase a home?

Is it as simple as this? How hard is it going to be to get a mortgage? I've had credit cards that I've paid in full since 18 and have a decent credit rating (but limited).

What the different between a purchase to let mortgage, interest only mortgage and a standard mortgage.

A little help and advice please, as I'm obviously quite confused...

SimbaSimon

TheEffect wrote: »

I'm 19 and currently working full-time, living with parents. I've planned on purchasing a property and renting it out, letting the rent pay for the mortgage (I'm guessing it's not as simple as this).

I'm earning 13k a year, saved 3k so far and hoping to have 7k by December (I'll be 20 then) for a property around 60k-70k. Am I even earning enough to purchase a home?

Is it as simple as this? How hard is it going to be to get a mortgage? I've had credit cards that I've paid in full since 18 and have a decent credit rating (but limited).

What the different between a purchase to let mortgage, interest only mortgage and a standard mortgage.

A little help and advice please, as I'm obviously quite confused...

Interest only - You only pay the interest on the mortgage, at the end of the term you either need to have saved the money to pay for the house another way or sell up. Most lenders require some sort of savings plan.

Repayment - You repay the interest and mortgage amount over a set amount of time.

Buy to let - Similar to a repayment mortgage but you are allowed to rent the property out. A standard mortgage usually doesn't allow this without permission from the lender first.

For buy to let your need approximately 25% deposit instead of the 10% your currently aiming for. If you save this much then your salary should allow for a house worth 70k with a mortgage of £52500.

Henry_P_Chester

Why in earth would you want to get into BTL in the current economic climate?

You need to consider how will you pay if your property is empty for periods? How will you afford the maintainence costs? When they arise?

Why don't you just start saving for a house to live in?

TheEffect

Henry_P_Chester wrote: »

Why in earth would you want to get into BTL in the current economic climate?

You need to consider how will you pay if your property is empty for periods? How will you afford the maintainence costs? When they arise?

Why don't you just start saving for a house to live in?

I live near Heathrow, London. I couldn't get a shed here for less then 100k.
The idea is to get mortgage a property somewhere else, but obviously I wouldn't be able to live in it as I work in London.

Henry_P_Chester

so how will you carry out your landlord duties if you live nowhere near the property? What if they phone you in the middle of the night to say the water tank has burst? Or they've lost their key and need your spare set?

I live in Essex and can't get even a flat for less than 140K in my area. But I've been saving for several years and have a large deposit now. Maybe you should do the same. In my opinion in 2 or 3 years house prices will be much lower. BTL is a massive risk at the moment but do your own research and make up your own mind. But buying a btl as your first property seems a bit of a strange idea to me.

TheEffect

Thanks for all the advice. Maybe I'll scrap the BTL idea. I still would like to purchase my own property within the next year or two though. I have a lot of family who live in Bournemouth area and I'm there a lot (this is where I planned on getting a BTL property), however I may still look at purchasing a property there and using it myself.