First time buyer, no job, £30.000 deposit

first_time_buyer_London

I am a first time buyer that would like to get onto the property ladder in London that wants to purchase a property as an investment that I would rent out to private tenants not live in.

The problem that I think I may have is that I have recently been made redundant and are in between jobs so I can not provide proof of income and pay slips however I do have £30.000 saved that I can use as a deposit. Can anyone give me advice based on my circumstances ?
I don't know if a "buy to let" mortgage would be the best option?

I haven't found a property yet as I want to find out exactly how much I can borrow at the most, basically I want to borrow as much as I can (ideally £250.000- £300.000 +)

I think I am interested in fixed rate and repayment deals only.

Any help and advice is greatly appreciated.

Many thanks in advance

Senior_Paper_Monitor

If you want to "purchase a property as an investment that I would rent out to private tenants not live in" it is a buy to let (or commercial) mortgage , end of ......

The highest buy to let LTV (commercial are lower) available today is 85% therefore you would be looking to buy something at £200,000 maximum but I suspect to can't make the income (rent) agaist mortgage pay (125% minimum required). The great majority of mortage products are max 75% value (how many properties are available at £120,000 ?)

And none of these are available to the unemployed which is what (hopefully temporarily) you are.

Sorry, but forget it !

There is usually a minimum provable income required - but that is a finite figure. Borrowing capablity is then based on rent:mortgage ratio - not income multiples.

first_time_buyer_London

Thank you. Would Buy To Let mortgages be an option for me though ? I thought that income wasn't taken into account just the return / potential rental income.

hcb42

what happens if you dont let it....

GMS

Buy to Let lenders are increasingly wanting to see a minimum earned income in addition to the rent supporting the mortgage.

Also First time buyers are generally not accepted for Buy to Lets with manylenders wanting to see landlord experience also.

With no income you are not going to be able to find a deal. Once you are back in employment have a look again

herbiesjp

I see a bridge........

However if it is a serious post, then the answer is you cannot do this unless you have a job.

Two reasons:
To meet lender criteria,
and/or to be able to afford the property should it be left empty.

If looking in London (or anywhere else) you will need a minimum 15% deposit, but a rental income that can then support the 85% based on the lenders rental covergae calculation. In London, that 15% will be more difficult based on higher prices.

Lifes_Grand_Plan

Why on earth would you want to put £30,000 into a (potentially) depreciating asset, risking all of your £30,000 with little potential to actually make anything on it? Its a crazy world.....

If I was you, i'd stick the maximum in an ISA immediately and then find a risk free home for the remainder (regular savings x as many as you can find, NS&I inflation beater?).....

At least doing that, the capital is safe and some interest guaranteed...

first_time_buyer_London

I have got £20.000 in a fixed rate cash ISA already and don't want to put the other £10.000 away for a 5 year term with NS&I Index Linked Savings Certificate but thank you for recommending it . I only like to commit to a 12 month term, fixed rate and NO STOCKS & SHARES can you recommend anything else that is NO RISK, FIXED RATE, 12 MONTH TERM investing £10.000 / £15.000 at all please?

Yorkie1

You can withdraw your money from the NS&I inflation buster after a year, with the interest for that year, I believe. You don't have to be tied in for the full 5 years.