can I get a Buy-to-let mortgage with bad credit

Lovestoshop!

Hi Everyone,
I have heard it can be pretty to easy to get a Buy-to-let mortgage. Is this true? I have a joint mortgage for £107000 with my partner and I also have a DMP with payplan, would this affect my chances of getting a buy to let mortgage?
Any advice will be muchly appreciated!

dunstonh

If you have sufficient deposit (typically at least 15%) and the rental income meets the cost of the mortgage, then lenders normally consider it. However, you are looking to enter a higher risk transaction (borrowing to invest is higher risk than just investing). Your existing credit postion, market timing and your liquid reserves are all going to impact on whether it is possible or the right thing to do.

financial_solution

lovestoshop,

Often lenders require the proposed rental income to be up to 125% of the proposed mortgage repayments. You will typically need a deposit of 15%. With a poor credit rating you may pay a higher rate of interest, meaning a higher monthly repayment meaning a higher rental income is required. Hence, the bigger the deposit the better.

good luck.

mark

Jonbvn

If you can find a property where the the rent covers 125% of the interest on an 85% LTV mortgage, then I would be extremely surprised.

From what I know most successful BTL investors are paying 40%+ deposits, in order to make it viable.

Drunken_duck_2

I cannot get a mortgage, it not because i cannot afford the re-payments it just that they dont think i earn enough. But what if i got a buy2let mortgage and lived there myself. Would the mortgage lender have to have details of the occupant?

luckyfool

Drunken Duck,

You are then committing mortgage fraud, the same as if you took a self certification mortgage and told the lender you are earning twice what you actually are in order to get the mortgage you want.

If you have enough deposit to get a buy to let mortgage (10-15%) then you can definitely get a residential mortgage without commiting mortgage fraud for an amount that would be well in excess of what 95% of people would consider comfortable. For instance I have seen some lenders consider in excess of 7* salary on a residential mortgage. Whether that is a good idea or not is another matter.

Definitely steer clear of going down the buy to let route to live in yourself though.

Drunken_duck_2

luckyfool wrote: »

Drunken Duck,

You are then committing mortgage fraud, the same as if you took a self certification mortgage and told the lender you are earning twice what you actually are in order to get the mortgage you want.

If you have enough deposit to get a buy to let mortgage (10-15%) then you can definitely get a residential mortgage without commiting mortgage fraud for an amount that would be well in excess of what 95% of people would consider comfortable. For instance I have seen some lenders consider in excess of 7* salary on a residential mortgage. Whether that is a good idea or not is another matter.

Definitely steer clear of going down the buy to let route to live in yourself though.

Many Thanks for the advice and i will surley steer clear of that.