BTL mortgage possible for a student with savings but no income?

Kelevra

Hi there.

I am a 21 yr old first time buyer looking into the possibility of a BTL mortgage.

Firstly, I should ask whether this is even possible considering my lack of income? I've read that so long as I am able to cover the deposit and take on the risk of mispayments, then I should be fine since the rental income reassures the bank.

I haven't looked at any particular mortgage brokers yet, but I'm hoping to put anywhere between £30-50k down on a £200-400k property in North London with the help of my parents.

I am in large amounts of student debt to student finance, but I hope this should not affect my ability to get a mortgage. It's mainly my lack of income that is cause for concern but I cannot get a job until I graduate. Apart from my student loans, I have one credit card but no debt. I have £5k in a cash ISA and £45k in other holdings.

I want to take on a project that will occupy me for the next year (as it is kind of an intermediary gap year before I graduate) with hopes that I can eventually live in it once I need to (5 or 6 years down the line). I know it will be a big commitment on my part and I imagine there are going to be a lot of naysayers on these boards but any advice would be very much appreciated.

Assuming this is even possible in the first place:

1. Where do I get started?
2. What criteria do I use to pick a property?
3. What criteria do I use to pick a mortgage broker?
4. Is there any literature/info you can recommend on the subject?
5. I've seen TMW offer BTL to first time landlords up to 75% LTV. Is this the maximum I can expect? I was hoping for something closer to 85/90 but I can understand if this is unrealistic given my financial position.

Thanks very much for your help.

Kelevra.

kingstreet

You won't get a BTL product over 80% LTV and most lenders offer less. The general maximum is considered to be 75%.

Most lenders won't lend to someone who does not already own their own home and you'll need the potential rent to be 125% of the monthly mortgage interest, assuming an annual mortgage rate of perhaps 6%.

Ask friends and relatives for a recommendation of a broker.

GMS

Most BTL lenders require you to be a homeowner and have a minimum income of 25k.

TMW restrict borrowing to first time landlords at 4.25 x income and require you to own a property.

No lender for BTL at 90%.

Very difficult this one if not impossible.

Could one of your parents go on to the mortgage with you?

monty-doggy

I agree, it's usually on a second property, you need to own your own home. And with little income it's very unlikely

catlady28

Hi

I read about the 'Buy for Uni' mortgage from Bath Building Society which is a buy to let mortgage aimed only at students. Don't know the details but it might be worth looking into.

Thrugelmir

Kelevra wrote: »

then I should be fine since the rental income reassures the bank.

And when the property is empty?

amnblog

Buy to let lenders don't like first time buyers as they suspect you will buy 'as an investment' then move in yourself.

It is a classic way for those with insufficient income to get a residential mortgage to buy property.

You will be raising two red flags to the lenders.

Kelevra

GMS wrote: »

Most BTL lenders require you to be a homeowner and have a minimum income of 25k.

TMW restrict borrowing to first time landlords at 4.25 x income and require you to own a property.

No lender for BTL at 90%.

Very difficult this one if not impossible.

Could one of your parents go on to the mortgage with you?

If I could convince one of my parents to cosign the mortgage with me, would it dramatically improve my chances?

My first thoughts on this were to limit liability to myself so that the responsibility lies first and foremost with me. But if it reduces my chances from nearly impossible to do-able, I may have to reconsider.

Thanks for the post; very informative.