Buy to let possible?

gratefulforhelp_2

What are my chances of getting a buy to let mortgage on a 240k house with a 40k deposit?

The rent is likely to match the mortgage repayments, but not exceed them.

I am new to even thinking about this, so not a clue.

There is a reason for considering this leap into the unknown - the house is next door and we have our eyes on it's garden.

CLAPTON

many BLT lenders will look for 25% deposit and rent of 125% of mortgage payments

gratefulforhelp_2

Thanks, is that ACTUAL rent, or rent that an estate agent says you can get?

GMS

Rent would need to be 120% of the mortgage payments to get an 85% LTV Buy to Let.

What rate have you based your calculations on?

House next door could cause issues. Is it attached to your own?

When you say eye on their garden what do you mean? You could not buy it and take land from it without lender permission which is unlikely as it would devalue their security.

gratefulforhelp_2

Thanks GMS

I found a BTL mortgage that was 5.5%, so that's what I based calcs on. So how does the lender know how much rent you will realise?

The plan would be to USE the garden as our own without legal transfer until we then sell the BTL house, with a (legally altered) smaller garden.

holly_hobby

Assuming you have a current residential mge

Kensington will do 85% with 120% rent to mortgage. (min earned income of applicant 30k), and accept first time landlords.

However, its unclear to me as to why you would want to enter into BTL, when there is no profit to be generated, yet you remain exposed to market fluctuations re property value.

You should also ensure that you have a contingency fund for general property repairs and maitnance, agents fees (if used), landlord ins etc ..

The figs seem a tad tight for me to recommend you go for this, but choice & risk is yours if you fit Kensington criteria....

Hope this helps

Holly

Edit - some data crossed with GMS post

Rental income is assessed by the surveyor using comparibles form same/similar properties in the immediate area.

GMS

Valuer would confirm the rental figure when doing the survey.

gratefulforhelp_2

Thanks both.

So really I need to get rent of nearer £800 agreed. Thanks for the tip on the mortgage. We could do that.

We could make a bigger deposit if we absolutely had to.

holly hobby the motivation is primarily to secure the garden/knock on impact on the value of our house/major improvement in enjoyment of our house.

Can you get BTL mortgages and rent the house as a self catering holiday let? I *think* that would raise more - more like £700 - £800 a week in season.

holly_hobby

Ok .. I understand re the garden and that profit is not your driving motive for the purchase.

With regards to Holiday Home mges - lenders whom were in the market for this are (but may have withdrawn since my placement days) are/were:-
Nationwide BS 85% LTV
Woolwich 75% LTV
Birmingham Midshires/BM solutions (under BTL scheme/criteria)

The surveyor/lender will also have to determine that the property is in a area/region whereby there is a market for self catering holiday rentals.

Of course if the property was not to be let out, you could consider applying for a mge as a 2nd property - with your income of course being sufficient to service all mges held.

Hope this helps

Holly

Thrugelmir

gratefulforhelp wrote: »

Can you get BTL mortgages and rent the house as a self catering holiday let? I *think* that would raise more - more like £700 - £800 a week in season.

Suggest you read up on the tax rules as different to BTL.

gratefulforhelp_2

Thanks Holly. I had thought about the second home aspect, but we have a residential mortgage of 215 k and combined income of around 75, so I don't think the income multiple will allow it?

Thrugelmir thanks, I will do that.