Buy to Let Mortgages

bon_3

OK . Don't buy another property. Buy to let property B pay off all debts except £58,000 mortgage sell property A pay off mortgage. reduce buy to let mortgage. Use a good broker. Thanks for input. I think I'll use this site to try to help others when it's all sorted.

JoeK_3

SallyD wrote: »

Okay guys and gals, you have worn me out reading this thread........I posted an eqnuiry on the Mortgages thread but now I am going to sound you out.

55 now, due to retire at 61 and intend doing so. Looking to buy for the first time. I intend moving up North, Huddersfield way. Can buy a reasonable place for maximum £120,000 realistically £100,000 should get me a small terrace. Now, I live in North London and no way can I buy my Council house so that is definitely not an option.

Now, I was intending to put 50% down and get a flexible mortgage for the balance over say 10 years.

I assume that you have saved £50,000 as the deposit.

SallyD wrote: »

Now I was hoping to rent out until I was ready to move up but to be honest the rents in the area I am hoping to go too probably wont make more than £300 per month and then I suppose Buy to Let mortgages come into it.

Rent out in the North? OK!

Rent on a property of £100,000 in the North would be about £380+ pm

SallyD wrote: »

Reading bits and bobs on the various threads strikes me Buy to Let mortgages are more of a business deal whereas I wanted simplicity and as it strikes me the novely of Buy to Let is wearing off should I whack as much cash on the property maybe buy for what I can pay and maybe just take a personal loan to make up the shortfall and do 6 month rentals as and when to get a little cash back - or would even short lets make me a "business" or could I not have a "lodger"

What?

A mortgage loan will always be cheaper than a personal loan, so your first idea was better!

SallyD wrote: »

I do feel as I am rambling on a bit but would be very interested to read your opinions.

Yea, ramble, ramble!

I'm on my next bottle of wine before I finish this, zzzzzzzzzz

JoeK

SallyD

JoeK thanks for your response - this is all very new to me and I have appointments with Building Society next week to get down to the nitty-gritty and house hunting within the next two weeks.

I am sure I will be posting questions.

Thanks

mark3528

i am a numptie i know !!!!!! all about property, but seeing as how you have planning permission, could you split the title, sell the plot with pp and the original property seperately, plot should fetch a few quid without any outlay

MarkyMarkD

Sally

I don't believe rental income will be as bad as £300 on a £100-£120k house, for starters.

If you are talking about not living in the house for up to 6 years, then you can't buy it on a residential mortgage and have a lodger. In your circumstances, you would want to get a BTL mortgage, but you wouldn't achieve that on the very low rental yield you are talking about.

SallyD

Okay, I need to do some homework on possible rents. I have a friend who rents out her own home which is a 3 bedroomed ex Council house in Honley (nice area)and she gets £350 a month. She has permission from her BS as she lived in house 5 years before taking over Management of a pub.

Do properties have to be over a certain value for Buy to Let mortgages? or are you saying that the interest etc., would not make it worthwhile on a rent of £300. I will probably post loads of questions after my visit to the BS.

bon_3

SallyD -I was refered to https://www.singingpig.co.uk. and found a calculator at http://www.jollyhippo.com/freecalc.php It has calculator for BTL mortgages.
Just key in: How much would you like to borrow? Interest Rate:% Rental Cover:% Term in years And it gives: Interest only cost per month
Repayment cost per month Rent required to borrow the amount requested
per month.
Might help give you better idea.
Even in the crappy area where I live with house prices relatively low compared to rest of country a 1 bedroom flat Rent is £320 pcm +

smileysmile

I am mystified by the above. Please explain to me how buy to let does not work in the medium to long term, ie 10-20 years? It will only be an unsuccessful investment if property prices drop in that time as your mortgage (or bulk of it) is paid and you take the capital growth. House prices double on average every 7-8 years historically. Worst price slumps (temporary! ie 2-5 years = 12%) Money down = 15% (or less). Tell me about a share or ISA where you put 15% of its value down and get such growth on the full investment??!!!!!1

smileysmile

Sally D - you could put the 50k (50% of 100K) of deposit down on a 3 bed in North London or the suburbs and get 2 lodgers in now and save rent if you are a tenant currently? Then move up North??