Student getting a mortgage

AshleyT

Hey,
I'm just starting out with researching information so please bare with me.

I'm thinking of a 'buy to let' mortgage. The area of my University there's a mass need of accommodation and rent prices are ridiculously high!! You'll be lucky to find a room less than £350 a month (excluding bills) and even then the rooms can be quite small.

For example with my current flat we are renting the total rent is £1500(bills excluded) a month for 2 quite big rooms, and 2 quite small. There's no living room.

Now, I have around £80k inheritance and looking around at the flat prices they seem around the £100k-£250k (for a 3-4 bedroom) mark meaning a 10-15% deposit on them would be quite possible. So if I made a deposit of £30k i'd still have 50k left.

I'm in my final year doing Computer Science meaning currently I don't have much income (7k a year).

If I could get a 4 bedroom flat and rent out three rooms for £325 a month each (which would be taken very quickly) it should cover the mortgage alone.

The problem is, how how many banks would accept my situation? I mean I'd still have a good 50k left in finance which even if I wasn't to work for the next few years would cover the mortgage even if i wasn't renting out...But it looks like any deal i'd get, would be rubbish? What would be the best way to go about this?

Thanks,
Ashley

Lokolo

I don't think you have any chance really.

Why are you looking at such a broad range? £100-£250k is a huge range. Cut it down.

ACG

Agreed with above, you wont get a mortgage on £7k and definately not a buy to let.

Do you not know anyone you could buy with for an 80/20 split? that way you can buy it outright and not have to worry about a mortgage.

Bigmoney2

If you are planning on living in the property yourself, then you could get a residential mortgage rather than buy to let, although as your in your final year if you subsequently move out ( due to say a job in a different area) then you would need to get the mortage companies permission to let, or change to a BTL.

As a student with little or no income you need to look at a guarrantors mortgage where someone else (parents) act as a guarrantor for the mortgage payments (assuming they are in a financial position to do this).

If you are thinking purely as a money making venture, you need to look at what is required both legally for a house in multiple occupancy(fire alarms, gas checks etc) as well as minimum standards of furnishing, your uni housing advisor may have info e.g each letting room will need bed, wardrobe, desk etc. also things like washing machine, cooker, microwave, fridge, sofa's dining table/chairs, crockery, cuttlery, hoover etc it all adds up.

Alternatively you could wait till you settle in a job and just use the inheritance as a deposit on a place to live yourself.

AshleyT

Lokolo wrote: »

I don't think you have any chance really.

Why are you looking at such a broad range? £100-£250k is a huge range. Cut it down.

Sorry, that's the general range alone the area I was looking at.
Although if you include 1k a month from renting...that would push income to 19k + returns from the 50k + 2k from part time work.

AshleyT

Also I'm not too sure about buying right out and using the whole of the money I have(+ someone else), effectively tying it all up.

I might just have to wait until I finish Uni and then buy somewhere and rent out I guess.

ACG

The main problem you will find is that not many lenders will lend on a BTL mortgage for a first time buyer.

There are a couple, but theyre in the minority. The good thing in your favour is that you have a sizeable deposit, on a £100k property you could put down 50% plus which puts you in a great position.

Your only option at the moment though would really be to purchase outright. Also dont forget, uni fees have gone up, the demand for uni housing will probably drop.

Maybe consult a mortgage advisor and get a few potential routes you could go down, atleast then it will give you a direction to work towards?

AshleyT

ACG wrote: »

The main problem you will find is that not many lenders will lend on a BTL mortgage for a first time buyer.

There are a couple, but theyre in the minority. The good thing in your favour is that you have a sizeable deposit, on a £100k property you could put down 50% plus which puts you in a great position.

Your only option at the moment though would really be to purchase outright. Also dont forget, uni fees have gone up, the demand for uni housing will probably drop.

Maybe consult a mortgage advisor and get a few potential routes you could go down, atleast then it will give you a direction to work towards?

Not for where I am, most students come from far away. That's the only reason they can get away with charging such high prices as it is(that and most students are private schooled so have the dosh). We were struggling to find somewhere for less than £100pw!

Thank-you for the reply and advice

opinions4u

Many btl lenders exclude student areas.

AshleyT

opinions4u wrote: »

Many btl lenders exclude student areas.

Well i'd be living in the place too - would it mean it wouldn't be classed as 'buy to let'?

dawyldthing

can you not get a do a upper at a reduced price, buy it outright and rent it reasonable as then you have it and are making from the start. I'd start small too tbh as theres a lot more to being a landlord, its something i would never do as theres too many pitfalls