Interested in Buy-to-Let

heranaway

Hello All,

I am looking to get onto the investment ladder, and myself and my wife have decided that we would like to become landlords. We have set a budget for a 2 Bedroom flat of around 200k and we could meet half of the required 25% deposit in cash.

My research has led me to believe that a 2 bedroom flats very popular and I could receive upto 1200.00 per calendar month.

My question is it wise to borrow the other half against our mortgage and how does this work? Does the loan get added to the mortgage?

I am with the Halifax, property price is 440k remaining balance is 255k so LTV is around 57%

Thanks in advance

theartfullodger

What happened when you asked the Halifax??

(Answer - possibly: If they say no remortgage main home with someone else then you'll be fine..: You'd need to declare what you are doing/have done to all lenders...).

That nice Mr Osborne will even give you tax relief on your relevant interest payments...

monty-doggy

You would technically be remortgaging your existing property, releasing the equity required and re adjusting the payments accordingly.

I would be careful though that your LTV doesn't go over 60% or you may find your interest rates rise!

sandsni

Just in case your not yet aware of the full implications of being a LL...

Read this http://forums.moneysavingexpert.com/...2&postcount=12

or try this New Landlords (information for new or prospective landlords)

Talc1234

1200 per month minus 10% service charge, minus 10% void periods, minus 10% agency fees = 840 per month that wont cover the 175,000 mortgage

Not forgetting maintenance, etc

Not worth bothering IMHO.

Thrugelmir

Talc1234 wrote: »

1200 per month minus 10% service charge, minus 10% void periods, minus 10% agency fees = 840 per month that wont cover the 175,000 mortgage

A 25% deposit would mean a £150k mortgage.

I do agree with your sentiments regarding preparing a business plan and crunching the numbers. Only by doing can one see if the return is worthwhile.

Talc1234

Thrugelmir wrote: »

A 25% deposit would mean a £150k mortgage.

Original poster is paying a 25% deposit made up from half cash, half from equity in their exiting property. This would increase their morgage for their existing property and consequently their costs compared to not buying the flat.

So total borrowing for buying the flat is £175,000