Buy to let mortgage advice.

GSDog

Hi all.

My mum has very recently inherited 2/3 of my grandmothers house, the other 1/3 has been left to her sister. My mum has decided that should would like to buy the 1/3 from her sister, renovate the property and let it out. The price has already been agreed with her sister and she basically needs to pay her £130,000. We've worked out that she'll need around £20,000 to renovate the property enough to rent it out.

She's never had a buy to let mortgage before so would appreciate any general advice you may have. Are there any decent guides out there?

What are the best deals for buy to let mortgages at the moment? Can you recommend any decent mortgage brokers?

She'll be looking at interest only for the time being.

Many thanks in advance.

GMS

For a BTL mortgage the rent would need to exceed the mortgage payment.

Does your mother have an income? Soem lenders require a minimum.

Renovation wise what needs doing? Is it major work or just refurbishment?

Being a first time landlord will eliminate some products so it is not a straight forward xxxxxxxx is the best lender. Also most would require the property to have been owned for 6 months minimum before allowing the mortgage.

Best to speak to a whole of market broker to see the best way forward

Annisele

Somebody will be along shortly with information about mortgages. (Edit - crossposted with GMS). It might help people if you'd say where you are (just generally - eg "Scotland" or "England and Wales" so we know which legal jurisdiction we're dealing with).

I know you didn't ask for general BTL info but I'm going to weigh in anyway; apologies if you already know all of this.

G_M has a useful post here with general information about letting a property.

Is your mum certain that your grandmother's property is the right one for her new buy to let business? Put another way, if your mum had inherited £240k (ish) in cash rather than an equivalent amount of house - would she have decided to set up a buy to let business? If so, would she have purchased your grandmother's house to start that business? Why or why not? I ask because longstanding family homes aren't always right for the rental market in their area (but of course sometimes they're perfect - depends where you are and what renters in your local market want).

GSDog

GMS wrote: »

For a BTL mortgage the rent would need to exceed the mortgage payment.

Does your mother have an income? Soem lenders require a minimum.

She works part time for my father and also gets housekeeping from myself and my brother. Do you know if lenders would include the housekeeping as a source of income towards the BTL mortgage?
She basically gets around £1,000 a month income.

I'm certain the rent would far exceed the mortgage payment - It's in a very sought after area where similar properties are renting out for around £1800 a month.

GMS wrote: »

Renovation wise what needs doing? Is it major work or just refurbishment?

I don't think there will be any major works. It'll have the electrics upgraded, new kitchen, new bathroom, new double glazed windows and doors to the rear and then just decorating. Nothing structural will be done and I think the plumbing is OK.

GMS wrote: »

Being a first time landlord will eliminate some products so it is not a straight forward xxxxxxxx is the best lender. Also most would require the property to have been owned for 6 months minimum before allowing the mortgage.

Best to speak to a whole of market broker to see the best way forward

Thanks for your help. The problem is that the will has said my mum has 12 months to purchase the property. As long as she can get the mortgage within the next 11 months or so then we'll be happy.

GSDog

Annisele wrote: »

Somebody will be along shortly with information about mortgages. (Edit - crossposted with GMS). It might help people if you'd say where you are (just generally - eg "Scotland" or "England and Wales" so we know which legal jurisdiction we're dealing with).

I know you didn't ask for general BTL info but I'm going to weigh in anyway; apologies if you already know all of this.

G_M has a useful post here with general information about letting a property.

Is your mum certain that your grandmother's property is the right one for her new buy to let business? Put another way, if your mum had inherited £240k (ish) in cash rather than an equivalent amount of house - would she have decided to set up a buy to let business? If so, would she have purchased your grandmother's house to start that business? Why or why not? I ask because longstanding family homes aren't always right for the rental market in their area (but of course sometimes they're perfect - depends where you are and what renters in your local market want).

Thanks for the advice. I am in the South East of England.

My mum has always wanted to own a second home and rent it out, so I believe she was left the cash she would have bought a second home and rented it out. You bring up a good point about the rental market in the area. We have asked advice from estate agents who we know and we've been told there is a strong rental market around here for family homes and it is in a sought after.

GMS

Income would be below the minimum for most lenders.

If the property is not habitable then there would be no advance until works were done. If it is upgrading required then there may be a possibility, as long as it is suitable for letting.

This is a case for a broker. BTL can be a minefield and unfortunately there are a few things against your Mum on this.

May be possible but much more research needed.

GSDog

GMS wrote: »

Income would be below the minimum for most lenders.

If the property is not habitable then there would be no advance until works were done. If it is upgrading required then there may be a possibility, as long as it is suitable for letting.

This is a case for a broker. BTL can be a minefield and unfortunately there are a few things against your Mum on this.

May be possible but much more research needed.

Thanks for taking the time to help. I will look for some decent whole of market brokers and see what comes up.

Conrad

The best options for this are TMW (The Mortgage Works), and Ipswich BS, neither of which require an income. Fairly straight forward. You don't need a broker for this one.