Just came back from the IFA, is this good?

homer_j_3

Can you overpay and underpay on the a&l deal - I havent got my stuff with me at home. If you can, I can see the sense in borrowing it and then instantly repaying it back as an overpayment and then drawing on it when its empty so no interest is charged - does that make sense?

I won't go into the ins and outs of residential mortgages as you have asked me not to but I presume you do not have another residential mortgage too or plan to get one in the near future? If you have, I presume the A&L are happy for this to continue?

Gareth83

homer_j wrote: »

Can you overpay and underpay on the a&l deal - I havent got my stuff with me at home.

I think you can, but no more than 5 or was it 10% of the value in one year I think

If you can, I can see the sense in borrowing it and then instantly repaying it back as an overpayment and then drawing on it when its empty so no interest is charged - does that make sense?

So what I was saying is kinda right? So it would best to get as much as possible but make a overpayment almost the next day and only use it if required??

I won't go into the ins and outs of residential mortgages as you have asked me not to but I presume you do not have another residential mortgage too or plan to get one in the near future? If you have, I presume the A&L are happy for this to continue?

This is our first ever mortgage

comments above

homer_j_3

ok - think on a&l there is unlimited overpayment on the unsecured bit but not sure if you can use a drawdown facility or borrow back. If you can, then that to me would make sense as no interest or repaymet is being made on the money you have borrowed for covering rental voids.

I would be cautious to all of this anyway because you may get tripped up along the way.You have to declare any people living in the property aged above the age of 17 and you wont be doing that i guess. I wouldnt like to say where else you could trip up legally along the way with the rental side too.

By borrowing what you are and doing it the way you are - you will have to consider your own buying plans carefully too. good luck

toonfish

please make sure you take out a landlord's liability insurance too.

Gareth83

I wont be buying nor will my partner.

We are both living at home and this is our only way we can realistically get on the market.

I'm due to go travelling for a year and my partner lives at home rent free.

So you think what we are doing is a viable option?

What would be the best amount to borrow then? Would it be better to aim for £120k? And immediately repay £10,000 so that we are only paying back as much as if we originally lent £110,000.

is that how it works?

If so, would that mean we would have access to £10k at a later date incase the property went vacant.

We should be able to sell teh house once all work is done for approx £125k based on other sale prices in the street, but obv. any house price increase over 2yrs would be better again.

herbiesjp

Sorry, just to clarify - you are looking to buy a property with a 100%+ residential mortgage, knowing that you are going to let it out?

Is that correct?

Gareth83

yes that is the crux

AndrewSmith

In which case no you cannot do it. You need to get a buy to let mortgage which you will not get at 100%+

herbiesjp

AndrewSmith wrote: »

In which case no you cannot do it. You need to get a buy to let mortgage which you will not get at 100%+

You took the words right out of my mouth :beer:

regularsaver1

I just don't understand why someone lives at home rent free on a good income , has no savings

I'm not on about the rent thing, but the 100%