Should I go for a 100% buy to let mortgage?

Skag

Hi,

I've recently purchased a property with some inherited money, a 4 bedroom house, which I am letting at the moment and gaining some income.

I just took a look at available properties at my area, and I saw some of them worth buying. However I don't have cash to invest in. I'm on a full time job where I am satisfied with my income (without having to touch the income rent I am enjoying).

I was wondering if a 100% (or 90%) mortgage is a good move.
If the house price is around 250k and the income it can generate is around 1200/1300pcm, will it be sensible?

I took a look at the various pitfalls i.e. the house cannot be let and you loose income, the house value drops and so on.

Thanks

iB1

You'll need 25% for a BTL mortgage

Pete111

I suspect the chances of you being able to get hold of such a mortgage as an (assumedly) relatively novice BTL investor are almost zero...

5 years ago? Yes. Now? Unlikely.

theartfullodger

Skag wrote: »

Hi,


If the house price is around 250k and the income it can generate is around 1200/1300pcm, will it be sensible?

Current BoE interest rate is 0.5% an all-time, never before seen, low.. So perhaps the numbers stack up.

However, if rates rise (peak was 17% within a year of Thatcher grabbing power) you might find it would not be "sensible". Do you have a Crystal Ball>???

Skag

I suspect the chances of you being able to get hold of such a mortgage as an (assumedly) relatively novice BTL investor are almost zero...

Why do you think so? Because my lack of experience (which I admit), or because of the rates and the general economic climate?

17%! woah! That's high indeed.

So if I get it right, you suggest that 1200-1300pcm is on the border line of the monthly payoff for the mortgage?

What do you think would be a better montly payoff for such a price?
i.e. if I pay back the monthly income + extra amount from other incomes.

<sebb>

You simply won't find anyone willing to lend you 100% BTL mortgage, so there is hardly any point considering whether it is worth it.

Pete111

Skag wrote: »

I suspect the chances of you being able to get hold of such a mortgage as an (assumedly) relatively novice BTL investor are almost zero...

Why do you think so? Because my lack of experience (which I admit), or because of the rates and the general economic climate?

17%! woah! That's high indeed.

So if I get it right, you suggest that 1200-1300pcm is on the border line of the monthly payoff for the mortgage?

What do you think would be a better montly payoff for such a price?
i.e. if I pay back the monthly income + extra amount from other incomes.

I think so because most BTL lenders won't touch an applicant asking more than 75% LTV with a barge pole. Nothing personal I assure you!

If you are a relatively novice BTLer then this will also be held against you but to be honest, even an experienced bod is not going to get 90-100% LTV on BTL these days due to the credit crunch making banks much more cautious.

You are 4 years too late I'm afraid!

Soot2006

Should I go for a 100% buy to let mortgage?

Go where for it?!

payless

not saying a good idea, but you may find a lender willing to lend 100% of new PP, if also putting up the existing ( no mortgage ?) property.

Fiddlestick

Skag wrote: »

I was wondering if a 100% (or 90%) mortgage is a good move.
If the house price is around 250k and the income it can generate is around 1200/1300pcm, will it be sensible?

What if prices continue to fall, the economy continues to decline and your tennents no longer think the rent being asked is market rate?

Can you reduce the asking price and STILL cover the mortgage?

Also what is interest rates go up to (for example) 7% or even higher - where will that leave your mortgage payments?

poppysarah

Can you see one anywhere?