BTL Mortgage Advice

GMS

First time landlords are restricted to 75% LTV with The Mortgage Works.

If I have read it right the OP would be a First Time Landlord.

holly_hobby

GMS wrote: »

First time landlords are restricted to 75% LTV with The Mortgage Works.

If I have read it right the OP would be a First Time Landlord.

Yes you are correct (I apologise for quoting 80%).

Under the circs, the OP is restricted to products from TMW "Let To Buy" range (which have a max LTV of 75% ).

Hope this helps

Holly

holly_hobby

Hi SV,

Consent to Let - as suggested in my initial post, this would be my first point of call, to see if Nationwide will provide their consent to let.

As stated, they will add a loading to your existing residential rate, and there will be an admin fee - but you are saved the problem of sourcing an appropriate BTL lender with the figs we are currently working with.

I have attached some direct links for you, and hope they help ...

General guidance on the process - http://www.nationwide.co.uk/mortgages/usefulinformation/letting.htm
Application for permission to let - http://www.nationwide.co.uk/pdf/mortgages/M30_Permission_to_Let.pdf

Hope this helps

Holly

stringvest

Hi, thanks so much for the advice and the links.

One more question - if we do get consent to let would we need to enter into a new mortgage agreement or could we continue with our base mortgage rate? I imagine if we have to enter a new agreement on the property that we intend to let then we'll have to pay considerably more than the 2.5% Base Mortgage Rate we are currently on...

Thanks

stringvest

Okay, so I read the info on the link supplied again (sorry jumped the gun a bit!) and noted that after 6 months of letting the property then we'd be charged an additional 1.5% variable. So combined with our BMR of 2.5% would we then be paying 4% (based on current BoE rate)??

Sorry may be obvious to you but bit of a minefield for me!!

holly_hobby

As already explained, you will attract a loading to your current residential rate - as your mortgage with Nationwide has effectively gone from residential to semi-commercial (i.e business) lending.

So yes if is says a loading of 1.5% ontop of BMR - thats what you will pay - as stated above you have to remember this wil have become a business loan. i.e you are renting your property for a rental income.

You will find that that 4% is actually very competitive in the BTL market.

Please consider all the implications and responsibilites of becoming a landlord - the mortgage interest rate is only the beginning of what can be greatly rewarding experience, or a living nightmare ...

Hope this helps

Holly

Mrs_Z

yes, I can only second holly hobby - re: additional costs - please consider the following:

- Provision for voids - you should calculate 10 months of rental income instead of 12
- Provision for bad debts (tenants not paying their rent...)
- Estate Agent letting & managing fees unless doing it yourself, in which case advertising fees
- Maintenance & repairs
- Insurance (buildings, plus any rent, legal costs/ protection or similar)
- Gas service, EPC, gas & electric safety checks, certificates
- Gardening or other services provided
- Provision for refurbishment/redecoration at relet
- Travel / admin costs

You'll soon find that you're out of pocket if your rental income only just covers your mortgage payments, specially if your first tenants only stay for 6 months....

kingstreet

Sorry folks!

I've now thrown away my Kensington criteria which went out of date on Thursday last week. 80% maximum for BTL it is.