Mortgage after owning property outright

Amy11

Hello

I was looking for some advice regarding purchasing flat as buy to let.
I can't get a mortgAge as had a ccj about 4 and a half years ago but am soon to be in a position to buy the flat cash. I don't have or never have had a mortgage in the past.

My question is if I buy a property cash will that put me in a position where the buy to let lenders will trust me and be willing to lend to me?

What I am looking to do is buy properties with a family member 50/50 and start to build a small portfolio of properties. Buying the first one is not a problem but I need to know if that step will enable me to buy further properties.

Any help appreciated.

The_J

Buying a property with a mortgage and remortgaging an unencumbered property is very similar. I.e. you can get a mortgage or you can't.

Speak to a broker as BTL criteria is a maze of stupidity and pedantry and one can only advise after a full discussion.

Amy11

Thanks for reply.

I am not looking to remortgage the property which I buy in the first instance. This is intended to be my first step on the property ladder. And will be a cash buy.

The next property I buy will be the one I intend to obtain a mortgage for.

I just want to know if it will be relatively easy to get the mortgage.

Currently I have been refused btl mortgage on the basis I don't own my own property so hopefully the step I'm taking will be sufficient to obtain future mortgage/s.

The_J

So you haven't been refused for bad credit? If so then you can certainly get around that home owner criteria by buying a place.

However not all lenders require you be a home owner to purchase a BTL (Natwest, Northern Rock, Woolwich are the main ones I can think of off the top of my head). Have you investigated them?

Dave_Ham

Buy to let mortgages are actually a higher credit score than a residential one.

Given the CCJ, I think you would be hard pushed to obtain buy to let finance before the CCJ drops off in 18 months.

Having a residential mortgage will in effect help your credit score in order for buy to lets in the future, as will well conducted credit generally...

Amy11

No havent been refused due to bad credit. Credit score is actually excellent and the ccj will drop off in year or so so that part doesn't worry me so much.

It's good to know that once I own the flat I could be on the right path.

I know I could have obtained residential mortgage but as I won't be living in the property had to rule that option out.

Simon_gloster

Amy11 wrote: »

No havent been refused due to bad credit. Credit score is actually excellent and the ccj will drop off in year or so so that part doesn't worry me so much.

It's good to know that once I own the flat I could be on the right path.

I know I could have obtained residential mortgage but as I won't be living in the property had to rule that option out.

Most lenders will not entertain a BTL application if they are first time buyers re; mortgage wise.

Amy11

Simon

Are you saying that if I buy a property cash at this time I will still be unable to obtain btl mortgage at a later date (On a different property)?

Simon_gloster

Not in every circumstance Amy, a FTB definition can vary from lendet to lender. Some just dont like the commercial element over a family/residential mortgaged property first.

You should be ok, just dont get picky or upset if x lender says its not for us.

Amy11

Thanks Simon

I understand what you mean now.

Why don't lenders understand some people don't require residential mortgages! I live in partners house and it is freehold.

Simon_gloster

Some of the specialist BTL lenders (birm midshires, mortgage works) may not quiz you.

Your traditional residential lenders want to maintain a certain % of BTL completions per year, ie 15% of total money lent, therefore will impose far tougher criteria.

Lenders of those you may have heard of treat BTL's as a luxury and shouldnt form part of the normal 'UK' mould therefore they want mainly bog standard less risky apps.

Hope that helps (you'll be ok). :-)