85% buy to let mortgages return.

IveSeenTheLight

Thrugelmir wrote: »

Better rates are available. However one lender requires the applicant to have an income of over £40k a year to access them. So excludes the majority.

I'm interested to see the facts that show the income levels of BTL applicants.
Remember, were not talking about median or mean wage averages here, it's BTL applicants..

that said it's strange to have a stipulation on personal income level for a BTL, it's usually requires a percentage of the mortgage interest (125%) as a rental income

Thrugelmir

IveSeenTheLight wrote: »

I'm interested to see the facts that show the income levels of BTL applicants.
Remember, were not talking about median or mean wage averages here, it's BTL applicants..

that said it's strange to have a stipulation on personal income level for a BTL, it's usually requires a percentage of the mortgage interest (125%) as a rental income

I'm merely quoting the terms of one current BTL lender on a new product. Better interest rate requires tighter underwriting criteria. No different to a residential mortgage.

IveSeenTheLight

Thrugelmir wrote: »

I'm merely quoting the terms of one current BTL lender on a new product. Better interest rate requires tighter underwriting criteria. No different to a residential mortgage.

I accept your showing the terms of one lender. I'm just questioning your assumption it excludes the majority of BTL applicants

Thrugelmir

IveSeenTheLight wrote: »

I accept your showing the terms of one lender. I'm just questioning your assumption it excludes the majority of BTL applicants

What proportion of the working population earn a salary in excess of £40k and wish to invest in BTL property?

IveSeenTheLight

Thrugelmir wrote: »

What proportion of the working population earn a salary in excess of £40k and wish to invest in BTL property?

I don't know. Do you?

The answer to that question would not answer your assumption that the majority of BTL applicants are excluded though.

P.S. I would think that the likelyhood of people considering investing in BTL would be in the higher percentile of wage earners.

Scots

A property has come up near me which I thought would make a good btl. So I phoned Halifax today and started the q&a session. I offered 50% deposit of the £120k price but they required an income of £25k which I don't have. I know for a fact the property would get £500 a month no problem. Seems unreasonable for a loan of £60k.

IveSeenTheLight

Scots wrote: »

A property has come up near me which I thought would make a good btl. So I phoned Halifax today and started the q&a session. I offered 50% deposit of the £120k price but they required an income of £25k which I don't have. I know for a fact the property would get £500 a month no problem. Seems unreasonable for a loan of £60k.

A quick check of the website confirms this as a requirement for Halifax.
http://www.halifax.co.uk/mortgages/buy-to-let/

Other lender's don't have the same stipulations
http://www.woolwich.co.uk/mortgages/buy-to-let-mortgages.html

Scots

Ok I actually phoned bank of Scotland with whom I already have a btl mortgage and they said they don't do it anymore and put me straight through to Halifax. So I din't get the opportunity to check the website.

From the Woolwich link you provided I notice they want £20k income, which isn't helping me.

IveSeenTheLight

Scots wrote: »

Ok I actually phoned bank of Scotland with whom I already have a btl mortgage and they said they don't do it anymore and put me straight through to Halifax. So I din't get the opportunity to check the website.

From the Woolwich link you provided I notice they want £20k income, which isn't helping me.

So you either work and earn less than £20k or you don't work at all.
You have £60k available and want to put it towards a £120k BTL.

Which area do you want to buy in?
Is it a 1 or 2 bed property?
What's the market rent for that type of property in that area?
What Rental Yield would you expect to receive?
I'm guessing the rent would meet the 125% mortgage interest criteria.
I'm guessing their including an income criteria to allow for coverage of voids / maintenance etc
Have you explored the option with the lenders of only putting down a 40% deposit and utilising the £12k as a back up to cover voids / maintenance etc.
If the property is in Scotland (going by your user name) are you aware that you would have to register as a landlord with the government.
Are you aware of the finances regarding the BTL i.e. how much can be offset before the income is taxed?

Just a few things to consider.

[edit] P.S. just recalled you already have a BTL. I take it you have included this in your business plan [/edit]

Blacklight

bingobob777 wrote: »

5.24% for 2 years - great
2.5% fee - great
0.4% broker fee - great

And on top of that a depreciating asset. Mugs.

You're looking at this from a completely different perspective to your average amateur BTL landlord.

They don't look at the 'investment' in terms of % yields, liquidity etc.

They have another house to their name and if they have to front up a bit of spare cash for it, they're happy paying £100 a month or something in order to end up with a property that will double in value given time (historically 10 years).