FTB Buy-To-Let or Residential?

tdh739

Hello there,

Most useful, informative and honest site on the web, congratulations to all.

Hopefully you can give me some tips and advice concerning my current house buying situation:

Aged 23, I'm a FTB with a good salary and minimal outgoings.

I've found the property I want to buy; two-up two-down stone built end-terrace - £122995. I've got a deposit and would have no problem borrowing the rest.

However, since I'm currently working overseas I'd like to rent out the property in my absence. Therefore my first question is this: am I eligible for a normal Residential mortgage given that I fully intend to let the property or must I opt for a buy-to-let mortgage and the associated extra expense? - It just seems a little unfair since I'm trying to get on the ladder, though other forces prevent me from living in my property.

Conversations over a beer or two suggest that lenders would normally require the owner to live in the property for 6 months before letting it, however this isn't possible for myself.

Any thoughts?

Secondly, and whilst I'm aware this has been covered to death in other threads, what is the current thinking on where to put remaining cash? The rental income would cover an interest-only mortgage, though I'd have plenty of spare income remaining to plough into either overpayment on the mortgage or other investments.

Apologies for the long winded post, but it is late :beer:

herbiesjp

How long have you been out of the UK?

When do you plan to come back to the UK?

What amount of deposit do you have?

Basically there may be some lenders that could at this on a residential basis - but needs a little more discussion than your conversation over a few beers :beer:

It will all depend on your individual situation

HTH

tdh739

I've been overseas for a couple of months now, and will be back in the UK in about a year or so.

I've got a 15% deposit, though could scrape together 20% if necessary.

Thanks for the input. I intend to make an offer today and as you can imagine I'd rather be sure of where I stand with regards the types of mortgage available to me before I get too far down the road.

Having spoken to an IFA he wasn't sure (which bodes well ) so I thought I'd canvas opinion here since there are a lot of well qualified people knocking about.

Cheers

herbiesjp

Well on the basis of what you have just posted, there are some lenders that could agree this for you. The deposit may have been a sticking point, but with 15%-20% that will make it easier.

Lastly then you need an income that can support the mortgage amount you are looking for, and any other debts you may have in the background

Maybe your IFA does not deal regularly in the mortgage market (he may only deal in investment class business) and as a result may not know this could be done for you

HTH

tdh739

Thanks very much for your reassurance. I suspected as much, which casts a level of doubt over the validity of anything my IFA says, but I'll be sure to make him justify his advice...

Income could support the mortgage no problem - I'm otherwise debt free.

Sounds like a good time to make an offer. Wish me luck!

herbiesjp

Good luck :T

tdh739

No luck so far, though I did offer 10% below the asking price. Apparently I was "way off the mark", which I thought was a little unprofessional, but that's EAs for you, eh?

Just out of interest, in the experience of the experienced, how many offers would a seller expect from a potential buyer before they got frustrated with slow climbing offers. I don't want to embarrass anyone involved, but this is dwarfed by how much that I don't want to pay more than necessary!

I suppose I'm looking for guidance on by how much to increase my next offer and any after that. £1000 increments would be frustrating and take forever, £5000 increments and I could drastically overshoot. No wonder people worry about these things :rolleyes:

Thanks for your help, it's comforting to share this scary process.