Buy to let mortgage

bigdavecox90

I'm a 21 year old guy and I've been lucky enough to gain £20,000 from a family investment.

I have however been told this is only to be spent on a property.

I was thinking of maybe buying to let?

Any advice or critiscism welcome guys.

Thanks,

Dave

holly_hobby

Why buy to let ? Why not a property for yourself ?

Notwithstanding the above, assuming BTL is the route you want - the 20k will I assume act as your deposit, with the remainder to be funded by a buy to let mortgage ?

Assuming you have no further deposit capital to add to the 20k - the maximum purchase price you are looking at is 100k (whereby your 20k capital is equal to minimum BTL deposit of 20%).

Assuming that this doesn't mean its a dead duck from go, your rental income would need to be at least 120% of mge outlay with 1 suitable BTL lender as you are under 25 yrs.

There are other important areas of lender criteria to meet, together with general do's and do nots associated with BTL (especially for a first time landlord) - but I won't go into them just at this stage unless you want more guidance.

Hope this helps

Holly

bigdavecox90

Thanks for your reply Holly.

If I'm completely honest, I don't understand alot regarding BTL mortgages, hence why I'm asking on here.

The current situation is I'm living in Dorset, rented accomodation with a friend.

I'm looking to purchase a property in the East Midlands (family live there) hence not sure I'd be living there myself.

Therefore I'm not sure where to start and any advice is helping an awful lot.

Hope this helps you understand my situation a little more?

somethingcorporate

Are you already a property owner? A lot of B2L lenders stipulate you must already be a property owner and have a certain level of income before lending for B2L purposes.

bigdavecox90

somethingcorporate wrote: »

Are you already a property owner? A lot of B2L lenders stipulate you must already be a property owner and have a certain level of income before lending for B2L purposes.

Thanks for your reply, no I'm not currently a property owner.

I lived in rented accomodation.

somethingcorporate

I am by no means an expert. It won't preclude B2L but may limit your options. I am sure when Holly comes back they will offer their much more informed opinion!

holly_hobby

Ok ... so you currently rent, don't want to buy to live in, and are not a home owner

This complicates things greatly ... due the fact that ( as far as I am aware), there are no current BTL lenders whom will accept a first time landlord whom does not hold a current property, under a BTL mortgage arrangement.

Sorry ...

Hope this helps

Holly

bigdavecox90

holly_hobby wrote: »

Ok ... so you currently rent, don't want to buy to live in, and are not a home owner

This complicates things greatly ... due the fact that ( as far as I am aware), there are no current BTL lenders whom will accept a first time landlord whom does not hold a current property, under a BTL mortgage arrangement.

Sorry ...

Hope this helps

Holly

Holly,

Thanks for your help.

So it would make more sense to apply for the mortgage for myself?

With around the £18.5k I have, what sort of property price would I be looking at realistically?

Do I go for fixed or variable?

Over how many years?

Sorry I don't know an awful lot.

somethingcorporate

It would probably be worth your while discussing your situation with a broker. There is no "best" option, otherwise there wouldn't be all this confusing choice!

Mrs_Z

Why the hurry to spend the money? If I were you, I would put it in a 1 or 3 year fixed rate account and forget about buying a property for now. You are so young and entering a BTL business at this stage in your life would be a very short term strategy. Save the money and in the meantime save even more so that in 3-5 years time you'll have a nice decent deposit to put down for your OWN home! At that point, get a 2 bed property and either rent out the spare room or move your girlfriend in - and once you've had your own home for few years, you can still then go down the BTL route if the idea still appeals.

bigdavecox90

somethingcorporate wrote: »

It would probably be worth your while discussing your situation with a broker. There is no "best" option, otherwise there wouldn't be all this confusing choice!

Well I went for mortgage appointment a couple of months ago and realised that buying a property where I live is near on impossible.

Therefore, that's why I have resorted to looking for a property up north.