Buy To Let Mortgage

Kellm9

Hi,

I wonder how I can do this >>>

I am a home owner and wish to buy a flat.

Two reasons for this, the main one is as a long term investment with some rental return. The second is somewhere for my kids to live when at university ~ 5 years time. It has three double bedrooms so possible flat share etc. I'm not too bothered about rental income when the kids are using it.

Anyway to the question. What would be the best way for me to buy this flat ? I don't understand about BTL morgages etc. I don't have the cash available to buy outright so I guess I'll need some kind of mortgage. The price will be around £110k and I can manage about £20k deposit.

I currently live in a house worth around £200k with a £52k mortgage. Total income is mine at £45k and spouse at £8k.

Any comments most welcome.

Thanks
Kellm9

JoeK_3

Kellm9 wrote: »

Hi,

I wonder how I can do this >>>

I am a home owner and wish to buy a flat.

Two reasons for this, the main one is as a long term investment with some rental return. The second is somewhere for my kids to live when at university ~ 5 years time. It has three double bedrooms so possible flat share etc. I'm not too bothered about rental income when the kids are using it.

Makes sense

Kellm9 wrote: »

Anyway to the question. What would be the best way for me to buy this flat ?

Either cash or with a mortgage

Kellm9 wrote: »

I don't understand about BTL morgages etc. I don't have the cash available to buy outright so I guess I'll need some kind of mortgage. The price will be around £110k and I can manage about £20k deposit.

You will need a buy to let mortgage.

For a property value of £110,000 you will need 15% minimum = £16,500 plus fees of around £2,000

Kellm9 wrote: »

I currently live in a house worth around £200k with a £52k mortgage. Total income is mine at £45k and spouse at £8k.

Any comments most welcome.

Thanks
Kellm9

Buy to let mortgages are assessed on rental income and it's the lender's valuer that would go and value the property and assess it for the potential rental income of the flat.

If you were to proceed with this purchase, I would contact three local Letting Agents and ask them to assess the property for you.

This way you would have a good idea if you were to be successful or not.

Based on a loan amount of £93,500 x say 6% = £467.50pm cost of an interest only mortgage, the rental income would need to be assessed at that sort of figure minimum per month.

JoeK

herbiesjp

Sounds pretty straight forward

Would have to be a BTL mortgage

15% deposit needed to get the better rates, although you can get away with 10% deposit with a few lenders
What is the rental income you would expect from the property if you had to let it out tomorrow in its current condition?

Kellm9

Thanks Joe,

I doubt the rental income would be £467.50pm. Mind you I'm not fully up to speed with rental prices. So to get this rental figure down I assume I would need to make a larger deposit.

Is it necessary to have a tennant lined up ?

I think it might be possible to take a further advance on my existing mortgage with the Nationwide ? Would this be a resonable method of funding ?

Would you recommend using a letting agent to let the property or is it easy enough to do by self ?

Thanks
Kellm9

sortofok

Some lenders are even basing BTL mortgages on borrowers' salaries without regard to the usual criteria such as rental income.
Fantastic. :rolleyes:

Kellm9

herbiesjp wrote: »

Sounds pretty straight forward

Would have to be a BTL mortgage

15% deposit needed to get the better rates, although you can get away with 10% deposit with a few lenders
What is the rental income you would expect from the property if you had to let it out tomorrow in its current condition?

Thanks herbiesjp,

I can probably come up with whatever deposit is required up to about £28k.

I don't know the rental income it would fetch. It's in a great commuting location, 500yrds from motorway slip road, 10 minute walk from main line railway, three double bedrooms etc etc. A brand new General Hosptal is getting built around the corner (this is where I'm thinking the tennant could come from) (staff not patients ).

Could you suggest some good BTL lenders websites ?

thanks

Kellm9

sortofok wrote: »

Some lenders are even basing BTL mortgages on borrowers' salaries without regard to the usual criteria such as rental income.
Fantastic. :rolleyes:

Thats interesting. Can you recall any of these lenders ?

Thanks

JoeK_3

Kellm9 wrote: »

Thanks Joe,

I doubt the rental income would be £467.50pm. Mind you I'm not fully up to speed with rental prices. So to get this rental figure down I assume I would need to make a larger deposit.

You got it!

Kellm9 wrote: »

Is it necessary to have a tennant lined up ?

No, just a short term tenacy agreement template that the lender will want to see.

Kellm9 wrote: »

I think it might be possible to take a further advance on my existing mortgage with the Nationwide ? Would this be a resonable method of funding ?

For the deposit?
Take care here! Further Advances are only for home improvements. Hope that you made a note of that!!!

Kellm9 wrote: »

Would you recommend using a letting agent to let the property or is it easy enough to do by self ?

Do you want the hastle?

You choose!

JoeK

Kellm9

Assuming I put down 15%+ deposit what rate is regarded as a good rate for a BTL mortgage ?

JoeK_3

Kellm9 wrote: »

Assuming I put down 15%+ deposit what rate is regarded as a good rate for a BTL mortgage ?

If you are borrowing up to 85% the whole UK buy to let mortgage market will open up to you.

You can select from the best to suit you, based on your thoughts and aspirations.

JoeK

Jo_anne_2

Kellm9 wrote: »

I think it might be possible to take a further advance on my existing mortgage with the Nationwide ? Would this be a resonable method of funding ?

Kellm9

It is possible to do this and we were advised by at least 2 brokers that would be a viable option, and it is exactly what we did to buy our BTL. The main advantages that spring to mind were no valuation fees, a cheaper interest rate than a BTL mortgage & we did not need to tie up a hefty deposit into the purchase. It is not a requirement that the further advance is used for home improvements, as the NW were well aware we were using the advance to fund a BTL purchase.