question for buy to let investors

want2bmortgage3

is it true that before anyone can start in buy to let, they must own their own house first? i am told it's not possible to get a buy to let mortgage without first having a residential one where you live?

if this is the case then surely it must take quite a few years for people to get into a position to do this, to fund the deposits on the BTLs. it surely must mean maxing out the residential mortgage, and getting the biggest possible loans (and smallest deposits) on the buy to lets?

hamster2013

you have been misinformed

I owned 3 buy to let properties before I actually purchased my own.
The difference is that in BTL they will require a larger deposit - usually in the 30% range, and the rental income should be around 150% of your monthly repayments.

this plus your salary is looked upon before geting a BTL mortgage.
they do not care if you are a home owner or not.

Cornucopia

It's a good idea to be a home-owner before a BTL landlord (just a question of priorities/conflicted use of money).

want2bmortgage3

i see, so you don't have to own a property already, but if you don't then you're salary is taken into account, as well as the projected rent income. instead of just the latter?

Brallaqueen

Some lenders make it a requirement that you have a residential mortgage before offering BTL. Some require a minimum income, and others require that the predicted rent meets certain criteria. Some lenders want all of the above!

Cornucopia

As a basic starting point...

- Minimum salary £25k

- Minimum deposit 25%

- Rent to exceed the mortgage (sometimes a wider margin is required)

- Also many BTL mortgages have large fees (c. £2k)