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Is 30K deposit enough>
Comments
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Does your clarified question not depend on where she lives too (if for a home for themselves)? I may have missed you mentioning it. On the figures you've given, I think at the very least, she could get a 120k property I would think, but possibly much more. In many parts of Scotland and Northeast England, this would buy a 3 bedroom house. My ex-neighbours have just sold their semi for £119,000 and it's a 3 bed with a garden and garage, in an ok area generally but definitely a nice street. Also close to motorways without being too close. You could get by a 3 bed on this street probably for around 110k-112k without a garage but otherwise the same.0
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Thanks for all the replies!
My query is for a friend lol.. and not for myself.. why would I lie about having 30K
What I'm hearing is that property is not the safest investment one can make nor is it guaranteed to rise. Fair enough, I'd not thought of that.
Clearly, buy to let is out of the question if rent needs to cover mortgage by 125% - I know this prob needs a seperate thread, but why is that? So, if mortgage is £500, then rent needs to be £1125?
As for loan to mortgage value - I understand better now. Its whether they can find something for say £120k in the area they want...0 -
Typically rental income needs to be 125% of monthly mortgage interest, with an assumed rate of perhaps 6%.
ie £625 rent = £500 monthly interest, or £100,000 mortgage at 6%.
The usual maximum loan to value is 75% and there are sometimes minimum income requirements and the need for a BTL applicant to be a homeowner already.
On the above example, the minimum deposit would be £33,333, leaving a mortgage of £100,000 on a property purchase price of £133,333.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Does your friend not want to buy a property of their own?
Putting all of their money into a Buy to Let may mean they are unable to save for a home for years. What is their residential status now?
If they really want to know what is possible they should speak to a broker. Many BTL mortgages are broker onlyI am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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