Help! Mortgage for investment property

mike.hutch

Guys,

I am after a mortgage to buy an investment property. The problem is I need to borrow £400k and I, or we as the mortgage would be joint with my wife, only have an income of about £40k.

Now this may sound a bit mad, but the plans I have for the property mean I will be able to make the money back within two years. I intend to use the capital I have in my current property to subsidize the mortgage in the meantime.

The thing is, will anyone lend me the money? Am I best off speaking to a mortgage adviser? or is it a waste of time?

Any advise would be very welome!

herbiesjp

If you are looking at the property to let out - you could get a bTL mortgage.

That way the mortgage amount will be agreed on the basis on the expected rental income in its current condition and market demand. It will not be based on your own personal income.

I would suggest running the scenario past a fee free whole of market adviser and let them come up with some suggestions.

HTH

mike.hutch

Thanks, the property would actually be split and the land developed. I think I need to speak to an adviser like you say, any suggestions of who to use? or should I just search locally?

Many thanks.

toonfish

if this is a commercial development then you will be needing a much bigger deposit to make any lender show an interest, at least 25% and possibly up to 40% if you hav eno track record.

Give us some idea of what you are hoping to do.

mike.hutch

Thanks for the reply, The property has a large buiding plot attached. I have a family member who is a builder, and we intend to build on the plot and sell the houses. Planning already exists, so it's not too much of a risk.

Scooby_Man

herbiesjp wrote:

If you are looking at the property to let out - you could get a bTL mortgage.

That way the mortgage amount will be agreed on the basis on the expected rental income in its current condition and market demand. It will not be based on your own personal income.

I would suggest running the scenario past a fee free whole of market adviser and let them come up with some suggestions.

HTH

Err...it would also depend on something like a 30% upfront deposit. On £400k, if you have a deposit for around £133k then all is good and well...

herbiesjp

Scooby_Man wrote:

Err...it would also depend on something like a 30% upfront deposit. On £400k, if you have a deposit for around £133k then all is good and well...

Who said 30%?

You can get BTLs with as little as 10% - however as always with BTLs it is the rental income that will dictate what kind of minimum deposit will be needed.

If the OP has 30% to put down that is down to them

toonfish

this would be seen as a commercial development, and you would need at least £100K deposit in my opinion. You could then finance the rest on a roll up basis with no repayments until the build is finished and the property sold but you might have to do this quicker than 2 years for most lenders.