any buy to let experts??

superskintmouse

Im looking for advice regarding where to start with buy to lets. i cannot find anywhere online that explains borrowing % etc. we currently own our home valued approx £180000 with an o/s mortgage or approx £60000. we are looking to buy another house to live in but have no idea how much we would have for the new house. any one have any ideas or suggestions? I am currently not working so we rely on husband s income alone so dont want to stretch ourselves but figure we could be missing out here! Any help or advice would be grately received

dimbo61

Why do you think you are missing out!
You and your OH with the bank own a property worth £180K with an outstanding mortgage of £60K so £120K of equity.
You also state that you want to buy another house to live in ( bigger house)
You are not working and the housing & mortgage market has changed a great deal in the last 3/4 years.
Buzz word is AFFORDABILITY
If your husband has a good income and you have a good deposit then you may well get your bigger house !!!
Good Luck

kingstreet

Maximum loan to value 75%
Rental income 125% of mortgage interest based on 6% annual rate
Minimum income £25k

These are the usual requirements, although can vary slightly from lender to lender.

superskintmouse

Thanks, no the new house doesnt need to be bigger its just for our pension fund really, figured if we can rent this one out and we pay mortgage on another one we will be better off in the long run if we can afford to. I know lots of people that have homes to rent out but hate the fact i cant get any quotes online. Can anyone recommend a lender to try?? the 75% loan to value is that on both all together or on the new one. Im guessing i would have to borrow against this house for the deposit on the new one, and move my exisitng mortgage to the new house then a buy to let seperately?

mothershipton

hi, speak to Which mortgage advisors. weve just bought a btl and they were very helpful and gave us lots of advice

Werdnal

On top of actually buying the property, you also have a lot of legal requirements, costs and tax implications of becoming a LL.

Read this:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

to see what you are letting yourself in for.

nollag2006

http://www.whichmortgageadvisers.co.uk/buy-to-let/buy-to-let-basics/

superskintmouse

Wow thank you guys, really helpful advice. We have decided to stay in our house and just buy somewhere smaller than we have to rent out as less stressful and hopefully not such a big financial risk. I knew this would be the place for help. you lot rock! Thanks again x

somethingcorporate

Make sure you do the research on your legal obligations before plunging in. It's not the cash cow (a) it once was and (b) everyone thinks it is.

Rental yields are at best about 5-6% which is pretty poor and you can get not much worse from a well managed savings account strategy with far less of the headache!

Fire_Fox

Consider how you would manage two mortgages if your husband got made redundant, fell ill or was injured and could not work. The rental income would class as income and the asset would mean you would be ineligible for many means tested benefits. Run an advanced search, the financial side of BTL has been covered many times on this board.

superskintmouse

Thanks everyone, I couldnt get the house out of my head that i wanted to move to so we went to see it today and it was a disaster!! needed thousands spending on it and thats not something i have the time or money to do. So i think we will put off buying/moving/becoming LL for a while anyway. Thank you all for your help though some really good tips and links for future reading.