Buy to let mortgage without being a current homeowner?

Oranjeboom

Hi there,

We are currently considering purchasing a house with a view to letting it out as a HMO for students. We currently aren't homeowners (FTB I guess) and would continue renting for job reasons.

The house we are looking at for a BTL mortgage is valued at approx 200k and the total income from the house would be about 22k/year. We would have a deposit of about 40k.

So would a lender give us a buy-to-let mortgage for this without us being current homeowners ourselves?

If yes, would this affect us as FTB when we do take the plunge and get a mortgage for our main residence? (i.e. would would still be seen as FTB?).

Many thanks,

OB

brit1234

None, you need a 25% deposit minimum. Personally I would be worried about student lets with the student fees announcements tomorrow.

Yorkie1

Oranjeboom wrote: »

Hi there,

So would a lender give us a buy-to-let mortgage for this without us being current homeowners ourselves?

In principle, yes.

If yes, would this affect us as FTB when we do take the plunge and get a mortgage for our main residence? (i.e. would would still be seen as FTB?).

Many thanks,

OB

Yes it can affect you as you will no longer be FTBs for the purpose of stamp duty. Individual lenders set their own criteria for 'FTB' products but they're often not all they're cracked up to be anyway.

GMS

HMO may cause further issues. Would you have the correct licences?

Not all lenders would be happy with HMO and similarly with students.

You would need a bigger deposit than 20% to make this happen I suspect.

You should sit down with a 'Whole of Market' broker to see if it can be done

Oranjeboom

Thanks for the responses. I'll talk to an advisor.

Despite the increase in fees, the house is 2mins from a big uni so there will always be demand with no student accommodation expansion possible on campus and no let up by the council on student houses.

Just the financials to sort out.

phlash

You'll have many problems arranging this.

HMO, students, planning, deposit requirements, experience and FTB status.

I've been through the lot, and there are ways to do it - but the road is extremely narrow and you may find yourself securing commercial finance rather than a BTL mortgage.

I've sent you a PM with some increased details/advice.