First Time Buyer - Looking to Invest in a BTL Buy to Let Property -Best Rates? APR

BDEnterprise

Evening all,

As the description sates im looking for some advice about getting into the buy to let market.

Ive found a property that i would like to buy, the rental numbers add up but im strugleing to find a buy to let mortgage at a half decent rate..

The property is a one bed flat available for around £75k and i have a 25% deposit. I currently dont have a mortgage and am in a position whereby i can live rent free for the foreseeable future.
My salary is sufficient to cover such numbers.

Any advice making this become a reality would be most appreciated. Im basicly looking for the latest and greatest rates and figures to get me on my way, or potentially be made aware of other options which might make things easier.

Thanks in advance Rich

Thrugelmir

BDEnterprise wrote: »

Ive found a property that i would like to buy, the rental numbers add up but im strugleing to find a buy to let mortgage at a half decent rate..

BTL is commercial lending not the same as a residential mortgage. Hence the higher fees and interest rates.

Ideally you need to find a property to fit the mortgage not the other way round.

For commercial investment a gross rental yield of 10% is a reasonable benchmark.

GMS

BDEnterprise wrote: »

Evening all,

As the description sates im looking for some advice about getting into the buy to let market.

Ive found a property that i would like to buy, the rental numbers add up but im strugleing to find a buy to let mortgage at a half decent rate..

The property is a one bed flat available for around £75k and i have a 25% deposit. I currently dont have a mortgage and am in a position whereby i can live rent free for the foreseeable future.
My salary is sufficient to cover such numbers.

Any advice making this become a reality would be most appreciated. Im basicly looking for the latest and greatest rates and figure to get me on my way, or potentially be made aware of other options which might make things easier.

Thanks in advance Rich

What do you consider a half decent rate?
What would the rent be per month?

You would benefit from speaking to a broker. 'Whole of Market' advice is what you need.

BDEnterprise

The property currently rents for £400pm, however £450 could realisticly be acheived.

In terms of the rates i was hopeing to get as low as possible (sounds obvious really) near 4%, but cant seem to find anything in that range.
I was also shocked to see fees of between £1000 and £2000!?
Any brokers you can recomend?

Thanks

Thrugelmir

BTL lending is very restricted currently. There's Mortgage Works, the Post Office or Paragon amongst the most active. Have you looked at these lenders?

GMS

BDEnterprise wrote: »

The property currently rents for £400pm, however £450 could realisticly be acheived.

In terms of the rates i was hopeing to get as low as possible (sounds obvious really) near 4%, but cant seem to find anything in that range.
I was also shocked to see fees of between £1000 and £2000!?
Any brokers you can recomend?

Thanks

Arrangement fees for BTL can be huge, hence one reason you should see a broker.

Couldn't recommend one sorry, not allowed to. Make sure any you find have access to 'Whole of Market'

Rent needs to cover mortgage plus x% so you should be ok there.

BDEnterprise

Surely there is only a couple of mortgage lenders offering the best BTL mortgages with the best rates?

Its one of the biggest financial commitments someone will make, the lenders are fighting over each other to offer the best rates and therfore get the biggest customer base?

Are you not allowed to make recomendations on this forum?

GMS

'Best Rates' are defined by the market. What are you expecting?

Not many BTL lenders will allow First Time Buyers. Some will not even do first time landlords.

Lenders fighting for business means they can pick and choose customers. A Buy to Let is a commercial product therefore attracts commercial rates.

What rate are you expecting? With BTL products the rate is imporatnt but the overall deal is more important. Could be better with a higher rate and lower arrangement fee for instance.

Brokers cannot recommend brokers on the site. You can ask for advice if you wanted to but recommendations can be seen as favouritism

Thrugelmir

BDEnterprise wrote: »

Its one of the biggest financial commitments someone will make, the lenders are fighting over each other to offer the best rates and therfore get the biggest customer base?

What connection does this have to BTL mortgages?

Lenders aren't fighting each other at the moment.

phlash

BDEnterprise wrote: »

The property currently rents for £400pm, however £450 could realisticly be acheived.

In terms of the rates i was hopeing to get as low as possible (sounds obvious really) near 4%, but cant seem to find anything in that range.
I was also shocked to see fees of between £1000 and £2000!?
Any brokers you can recomend?

Thanks

That's the going rate....

In your position I would be planning my figures on 6% BTL mortgage deal and £2,000 of fees. If the figures still look attractive then carry on, else walk away.

You have to separate in you mind BTL mortgages and personal home mortgages - they are two different beasts entirely.

PS. Base your long term rental on a maximum of 11 months rent per year, maximum.