Buy-to-let mortgage without permanent job?

Hartson_2

Thrugelmir wrote: »

Running a business is a little more complex financially.

Have you prepared a business plan? Factored in the what if's?

Not yet. I had assumed it wouldn't be possible to even get a mortgage until after I received a permanent contract, so was going to formulate an idea during my training contract. Looking to model it almost identically on a friend's business, which has done similar to above but built up a portfolio of approximately 20 properties.

I appreciate knowledge grows the more you look into it, which is why I'm first investigating whether I can even get a BTL mortgage without a permanent job.

Hartson_2

I'm aware about many of the additional costs, however, such as managing agents, insurance, legal fees, accounting fees, repairs, maintenance, and furnishings.

ACG

15% BTL first time buyer on a contract - have they told you that knowing all of the above? (I dont think the contract is a major issue though).

I would have thought more like a 20-25% deposit would be needed, although you seem to be there or there abouts anyway.

Thrugelmir

Hartson wrote: »

Looking to model it almost identically on a friend's business, which has done similar to above but built up a portfolio of approximately 20 properties.

You may have missed the boat. The BTL boom passed a while back.

Hartson_2

Sterling_Mortgages wrote: »

Hi "Hartson". This looks like an interesting challenge for you and so I will try and help you by addressing each of the issues that you have in turn:

Issues:

1. You are a 1st time buyer: most BTL lenders don't like this and may refuse to lend on this basis alone.

2. You are a first time landlord: again lots of the BTL lenders don't look favourably on this either.

3. You will not get any of the main stream BTL lenders to lend to a newly formed Ltd Company, or indeed to a Ltd company at all.

4. If the property is "HMO", and it most definitely will be if there are students living there, then there are only a few BTL lenders that will allow this.

5. There are BTL lenders that ask for a minimum income, but others dont; so income isn't your main problem in my opinion. It would cause a bigger problem if you were looking for a residential mortgage.

Solutions:

If you have a 25% deposit then could do the following:

- if your parents' house is mortgage free, ask one of them to buy the property jointly with you. If they have an income then you can use this (although I don't think you will need it).

- By adding a parent onto the mortgage (as a joint owner) you can get around the issue of being a first time buyer - there is at least one BTL mortgage company that would accept an application on this basis.

Good luck with the purchase. Let us know how you get on.....


PS: I am a mortgage broker in S. Wales. I also own a property portfolio and currently let property to students too.

This actually immensely helpful, thank you so much Looks like there are quite a few hurdles!

With regards to HMOs, I know they have more regulations involved, but isn't that only for 5+ students? 4 students or less doesn't count as an HMO? (Or am I wrong?)

Many thanks again.

Hartson_2

Sterling_Mortgages wrote: »

Hi "Hartson". This looks like an interesting challenge for you and so I will try and help you by addressing each of the issues that you have in turn:

Issues:

1. You are a 1st time buyer: most BTL lenders don't like this and may refuse to lend on this basis alone.

2. You are a first time landlord: again lots of the BTL lenders don't look favourably on this either.

3. You will not get any of the main stream BTL lenders to lend to a newly formed Ltd Company, or indeed to a Ltd company at all.

4. If the property is "HMO", and it most definitely will be if there are students living there, then there are only a few BTL lenders that will allow this.

5. There are BTL lenders that ask for a minimum income, but others dont; so income isn't your main problem in my opinion. It would cause a bigger problem if you were looking for a residential mortgage.

Solutions:

If you have a 25% deposit then could do the following:

- if your parents' house is mortgage free, ask one of them to buy the property jointly with you. If they have an income then you can use this (although I don't think you will need it).

- By adding a parent onto the mortgage (as a joint owner) you can get around the issue of being a first time buyer - there is at least one BTL mortgage company that would accept an application on this basis.

Good luck with the purchase. Let us know how you get on.....


PS: I am a mortgage broker in S. Wales. I also own a property portfolio and currently let property to students too.

In addition, do you know whether my parents age would be an issue? They're mid-50s now, with one of them predicted to retire at 62 and the other at 67. I mentioned it to them and they thought they'd be too old to get a mortgage at their age?

poppy10_2

Thrugelmir wrote: »

You may have missed the boat. The BTL boom passed a while back.

Ignore this guy, he's just trying to drag you down. Can't go wrong with bricks and mortar. :j

Hartson wrote: »

With regards to HMOs, I know they have more regulations involved, but isn't that only for 5+ students? 4 students or less doesn't count as an HMO? (Or am I wrong?).

It's 3 actually, but don't worry too much about it.

Thrugelmir

poppy10 wrote: »

Ignore this guy, he's just trying to drag you down. Can't go wrong with bricks and mortar. :j

Could only be said by someone with a vested interest.......

GMS

Thrugelmir wrote: »

Could only be said by someone with a vested interest.......

Long term bricks and mortar will be a good investment. If somebody is looking for a short term gain then they need to be wary.

Hartson_2

poppy10 wrote: »

Ignore this guy, he's just trying to drag you down. Can't go wrong with bricks and mortar. :j


It's 3 actually, but don't worry too much about it.

So 3 students or less is not an HMO, but 4+ is?