Is 30K deposit enough>

regularguy007

Hi there

I'm having this argument with a friend. She has 30K saved up. However, she does'nt believe/know what this gets her in the property market.

I know 90% mortgages are rare, but my argument is that she can negotiate quite fiercely with banks because how many people have that kind of money in this climate?

She also has a partner who can contribute towards the monthly repayments - it would be fair to say they earn over 2K each per month.

Surely one can get something decent with that?

_Andy_

she can't 'negotiate' - either she meets the LTV thresholds or not.

dimbo61

What sort of mortgage amount is she looking to borrow?
£30K deposit on a £120K property is 25% and a good start but £30K deposit on a £300K property might be a struggle even with both of them earning £2K a month

regularguy007

dimbo61 wrote: »

What sort of mortgage amount is she looking to borrow?
£30K deposit on a £120K property is 25% and a good start but £30K deposit on a £300K property might be a struggle even with both of them earning £2K a month

I guess she does'nt know to start with. Clearly 300k might be out of the question. Maybe my question was a bit misdirected. Not knowing much about property myself, would it not be fair to say that she has an opportunity to get on the property market?

I suppose it comes down to what she wants out of her investment?

ILW

regularguy007 wrote: »

I guess she does'nt know to start with. Clearly 300k might be out of the question. Maybe my question was a bit misdirected. Not knowing much about property myself, would it not be fair to say that she has an opportunity to get on the property market?

I suppose it comes down to what she wants out of her investment?

Is she looking for a home or an investment?

regularguy007

I think she'd want a 2 bed if it's for home. That'd prob. be 250k+ - prob better used on a studio somewhere (to let out)?

Would it be fair to say that if she's making over £200 profit with rental, then she's done well?

Thrugelmir

regularguy007 wrote: »

Would it be fair to say that if she's making over £200 profit with rental, then she's done well?

Unless the tenant defaults or the property is unlet for a period.

I always ask the question would you borrow £250k to run a fleet of ice cream vans. Most people say No, too risky.

Yet they are happy to start a property business as its so profitable.

kingstreet

As mentioned, it's not the finite amount of money that she has which is important. It is the loan to value generated by the deposit as a percentage of the purchase price of the property which is the major issue.

_Andy_

Buy to let is more likely to need around 25% deposit+

GMS

As a first time buyer a Buy to Let mortgage will be restricted. Rent would need to cover the mortgage by 125%.

What exactly is your 'friend' looking for?

somethingcorporate

£2,400 net income from a £30k "investment" in a dodgy property market?

Most people would be better off shoving it in the bank and having a few less sleepless nights. It doesn't take many voids / tenants trashing your property before you want to get out but realise you cannot without losing half your deposit as your property is now worth less than you paid for it and it is in a complete state!

If you know nothing about property perhaps your "friend" is better off looking elsewhere for advice.