Ftb btl

EllyBelly

Hi Everyone.
My family is in quite a quandary, and to help out I am looking to buy my dad’s house from him (which was originally my granddads) I’m hoping he’ll put a bit of the equity towards a 5% deposit for me. Don’t know how that works. But I don’t have a deposit which is why I’d need his help.
The thing is, whilst I know I can get a mortgage (if I can scratch a deposit together) I also know it will be difficult getting by, and was wondering what the possibility is of buying my dad’s house, renting it out, and making enough money to pay the mortgage repayments from the tenants.
This is a fresh idea to me. The reason I’m so determined to have the house is because it’s been in my family since it was built.
I just think I need some advice and guidance.

kingstreet

There are very few 95% deals around today and they are expensive. At 90% you'll find a better selection of lenders and rates.

A buy to let mortgage is likely to need a 20%+ deposit.

MFSaver

- How much of a mortgage do you need?
- What are rent levels like in your area for similar houses?
- Keep in mind that rental income is taxable, but certain deductions apply when calculating the taxable amount.
- Keep in mind possible costs of maintaining the house in a good enough condition for your tenant.
- Are you ready to be a landlord? If you opt to use a letting agent, bear in mind their agency fees.
- Keep in mind that there might be periods where the house will be unoccupied. Can you afford to make the mortgage payment without rental income?

Mrs_Z

If you can only just afford it = you can't afford it.

BTL mortgages usually require a minimum 20% deposit, most require you to be a homeowner if you're first time landlord, and arrangement fees are expensive on them.

JQ.

Is it even possible to get a BTL mortgage if you don't already own a home these days?

How can you possibly afford to run a BTL business if you can't afford a deposit?

Why not buy the house with a standard mortgage, move in and take in lodgers for the first couple of years to help pay the bills. This is what I did with my first house and it made life so much easier.

EllyBelly

Thanks for the feedback guys.

Lodgers aren't an option although I have definately looked into it. Suppose it's back to the drawing board.

And back when I was going to buy it to live in, I was offered a 95% mortgage. That was last month.

Thrugelmir

EllyBelly wrote: »

The reason I’m so determined to have the house is because it’s been in my family since it was built.

You need to detach business from personal. Otherwise your judgement will be become clouded.

kingstreet

EllyBelly wrote: »

And back when I was going to buy it to live in, I was offered a 95% mortgage. That was last month.

Skipton is still in the market and Hanley has come in. Clydesdale is out at the moment, I think.

GAH

You were offered a 95% mortgage on the basis that you would be living in the property yourself.

If your sole plan is buying to let, you need at least 20% deposit, then all your other costs on top each year, such as agents fees, gas safety fees, EPC fee, Inventory fees, Money aside if tenant doesn't pay rent, money aside for any essential repairs, and list goes on.