Anyone doing 100% BTL mortgages with no deposit?

northerner999

Kaz2904 wrote: »

Thanks for the answers. I thought it might be the case. We will continue to save in order to gain a deposit- or depending what happens with the market, get enough to buy a house outright. Our thought was that if we got the mortgage at 100%, tennants could go in and would cover the interest part of the mortgage with their rent and we could use our saved monthly mortgage payment to start clearing the capital owed on the loan. Then start again with another when the first has been paid off.
We're quite risk averse so want to be absolutely sure that we can cover any mortgage payment with our own wages (yes I know one of us could lose our jobs at any given time).

Interested to know why you are against someone having a mortgage for a BTL property northerner999? Would you feel happier if we didn't borrow for a BTL and bought it outright? After all, mortgage companies only lend out money for profit.

I think you've mis-read my post. I would expect pretty much every BTL property to be purchased with the help of a mortgage, of course, but I would not expect any lenders to provide a 100 per cent mortgage (which is what you asked about) for this purpose, especially to someone with no apparent background in letting property commercially.

Kaz2904

Thanks for replying. You're right, we do have no background in letting commercially. We're happy to save a deposit, I just wondered if there were any 100%mortgages left any more.

chewback

Honestly, if you cannot grasp what people are saying about remortgaging your mortgage free property to buy the buy to let property you should not really be looking at BTL.

suze200

KAZ, as others have said it seems the best deal for you would be to re-mortgage the property you live in to buy your BLT as a cash buyer. Lower fees, interest rate etc.

You would then in fact be getting a 100% on the BLT assuming the cost of the BTL is 75% (or less) of the value of your mortgage free house.

Kaz2904

chewback, I did understand what was being said about remortgaging our home for a BTL. It was so clear that I didn't think it necessary to comment.
I doubt a 75% mortgage on our current home would give us enough to buy a BTL in our area anyway. We live in a modest 3 bed semi in a nice area worth about £160000 and would be buying something around £140000. There's no rush at the moment. We'll just sit and save

bigadaj

Kaz2904 wrote: »

chewback, I did understand what was being said about remortgaging our home for a BTL. It was so clear that I didn't think it necessary to comment.
I doubt a 75% mortgage on our current home would give us enough to buy a BTL in our area anyway. We live in a modest 3 bed semi in a nice area worth about £160000 and would be buying something around £140000. There's no rush at the moment. We'll just sit and save

Unfortunately you patently haven't understood this process.

Remortgage your current house probably for slightly less than 25% of its value. This money then provides the 25% deposit for your buy to let property, on which you get a buy to let mortgage of 75%. A lender would need to see you Can achieve a rent of 125% of the mortgage payments at say 6%. You should be able to get an interest only mortgage for your buy to let, so reducing payments and making things easy to write off your mortgage interest against tax.

Also you should be able to offset the interest on your own houses mortgage against tax as there is a clear link for this money.

Buy to let is a business, do your research and be aware of the hassles of tenants, non payment, void, damage etc, this is a business and you get nothing like the consumer protection you would for a residential mortgage or other financial products.

kingstreet

As bigadaj has suggested, your options are;-

- preferred option is to borrow all the money on your own home
- if your equity is limited, borrow some on your own home and some on the property to be let.

Talk to a broker about the options.

Either way, if borrowed money is used to purchase the target property the mortgage interest should be an allowable expense, regardless of which propert(y/ies) the loans are secured on.

Kaz2904

Sorry. I have understood the process. The original question was if anyone does a 100% btl mortgage. The answer is no. There are other options. I can remortgage my own home to provide 100% of the mortgage needed for a btl AND get tax relief on it as I can show it's solely for the btl property. Or I can remortgage my current home for a smaller amount to provide a percentage of a deposit on a btl. This could provide a more favourable interest rate. I could also save a deposit for a btl or I could save and get a btl property bought outright. I could look at secured loans for a deposit or I could look at interest free credit cards and stoozing.
I am aware that btl is not a hobby and that there is no point going into it blind. We would seek legal and financial advice prior to doing anything. We are not high earners and are quite risk averse hence the wish to be able to cover (and more) the monthly mortgage payment from our wages long term even if the house/ flat/ bungalow stays empty or gets trashed and needs major repair work doing to it.
As I work in a hospital, there are thousands of staff there who are looking for long and short term homes. We also live near the coast so if the property was suitable it could present as a short term holiday let.
However, none of this matters at this moment because we don't have enou cash in savings to have a 6 months wages slush fund and to cover legal fees for any purchase.
Thanks for all advice and opinions. Don't worry, (if we do ever get a btl property) we have no intention of being slack or dodgy landlords. We would take our responsibility seriously and would look after our tenants as we feel that good tenants are an investment in theirselves.

usa1

Well done for clearing the residential mortgage..

I would suggest just keep saving for a big BTL deposit till you find a property that suits your investment needs, then your can better a better deal,