Buy-to-Let (Low salary)

sazpot

Hi,

Have just confirmed with HSBC that I do not qualify for a buy to let mortgage with them and that it is unlikely that my permission to let will be extended in the summer for a 4th year. I have had my mortgage with them since early 2009 when I lived in the property.

I do not have a high enough salary to qualify for many buy to lets (under £25k) and I am only on a 3 month contract so my income is not stable anyway.

Based on the this and the following information does anyone have any experience of lenders who may be able to help me without the rate being sky high?

Property Value: £130000-£132000 based on identical properties sold in the last 6 months

Mortgage required: circa £58000

Rental Income: £725 pcm

Ground Rent & Maintenance: £1200 pa

Was a new build in 2009 and thus far property maintenace has been minimal.

I am not on any other mortgage or liable for rent elsewhere.

The property has proved a valuable asset after all fees and tax and I am reluctant to sell it.

I am looking to know where I stand now as my tenants have asked for a second time if I am willing to sell the property to them.

I currently only pay 3.79% interest and have a fee free repayment mortgage with 21 years remaining, I am 27. I like to over pay and would only really want a 15 year mortgage if I would be penalised for over payments.

Many thanks,

S

kingstreet

Talk to a decent whole market broker. You should be able to find a home for that mortgage. Unfortunately, high street branches of banks and building societies aren't really geared up for BTL business.

Jimbo1976

Speak to a broker, the vast majority of buy to let mortgages are arranged through them. Most lenders do ask for a minimum income (typically £25k) but there are some specialist ones who may be more accomodating, especially as your LTV is loan to value is less than 50%. You will have to pay a much higher rate than 3.79%

kingstreet

Jimbo - there's a 3.74% 2 year fix with one BTL specialist with a fee of 1.5%, which works out at £870 in the OP's case, so the rate might not be too far way from current.

Jimbo1976

Thanks Kingstreet, you are spot on as ever. However when you put the fee back in it effectively becomes 4.49% over 2 years. I just wanted to try to structure the OPs expectations that they will have to pay more for a BTL product their their HSBC rate

sazpot

Thanks for your responses.

I was expecting a broker to be the suggestion, I am just unsure of how to pick one to go to and worried that they will think I am wasting their time as it is likely that I will stay with HSBC until the permission to let expires in August as I am fully expecting to pay a higher interest rate for it being BTL and because I am not the best BTL candidate by many companies rules.

I am just concious that I need to plan early to make sure I know my options and a ball park of just how much higher the interest rate would be. Overall the property is a good investment at current rates and by my calculations would still be a good investment at 6% interest.

I just needed to feel reassured that I do have a chance of getting a BTL mortgage given my circumstances!

Russe11

will it not make a difference that its a lease and not a freehold?

kingstreet

Russe11 wrote: »

will it not make a difference that its a lease and not a freehold?

How do you know that? I've re-read the OP's posts three times now and I can't find a single word about the tenure.

Leon_W

Ground rent and maintainance @ £1200 pa seems to indicate it's leasehold, but no, it doesn't make any difference.

Thrugelmir

sazpot wrote: »

it is likely that I will stay with HSBC until the permission to let expires in August as I am fully expecting to pay a higher interest rate for it being BTL and because I am not the best BTL candidate by many companies rules.

I'm unsure as to whether HSBC offer BTL products. May be worth checking. You may find that HSBC levy a penal rate of interest if you take no action and effectively default.

GMS

OP what is your residential status currently?