First Time Buyer or Buy to Let?

jicms

I am a first time buyer and want to purchase a buy to let property while living at home a bit longer as it seems to be the only way I can get on the property ladder. However I don't have a deposit.

My income should cover a 100% LTV (possibly graduate) mortgage. However I don't know if I'd be eligible if I rent the property. Buy to Let mortgages seem to loan a maximum 90% LTV and are also more expensive.

Could I just purchase using a standard morgage then let them know afterwards that I intend to let the property? Any help would be appreciated.

UK007BullDog

You could get a residential mortgage but that would be cheating if you did it knowingly , but then lots of people seem to be doing it as it is the only way for them to get anywhere if still living at home.

Who says you are not going to live in the property eventually> I mean you can buy it as if you wanted to live in it yourself and go for a 100% or up to 125% mortgage but you will most likely end up paying towards the mortgage as the rental might probably not cover the whole mortgage costs.

Some lenders let you add the stamp duty, solicitor costs and survey costs, but you would be paying interest on them for the duration of the whole mortgage. Maybe your parents can help you pay for those up front?

I guess the first step is to go and speak to your bank you have your account with to see what they can do for you. They most like want to have at least 3% - 5% deposit for a FTB.

And please people do not castigate me about telling the OP to go for a residential mortgage. The OP can only do it once anyway and I am all for helping the FTB as they need help. Waiting for a housing crash is not the answer, as we can wait for many years still to come. Who knows what will happen???

ajaxgeezer

Bulldog, you are beyond castgation.... the lenders have their own rules regarding change of use;) of a mortgage and can approve or deny any request accordingly. No-one should expect you to do their vetting for them, they are big enough and ugly enough to do that themselves.

UK007BullDog

The lenders have so many rules, but do they ever check them? Hardly, but if it goes pants they say its the advisers fault or the brokers fault.

As long as the lender gets their monthly payment on time they do not care. If they did they would tighten the lending process and not relax it more and more.