How does this sound as an investment?

Thrugelmir

Moneysaverchris wrote: »

but surely the money they pay into my mortgage is money i don't have to pay and therefore profit too?

Only interest is tax deductible. Capital is repaid from after tax profit i.e. cash.

Yorkie1

A BTL house at £130K and 75% LTV will involve the following up front expenditure:

- deposit £32.5K
- survey c.£500
- sols fees c.£1K
- product application fee £xx
- stamp duty £1.3K

Do you have £35K+ available, or are you going for their only 90% LTV product?

On your other identical thread, you said that you had emergency savings of £6K, though it's not clear if that's after you've paid off the £7.5K loan (or £5K outstanding balance depending on which of your posts you read).

Their calculator says the max you can borrow on £20K, even without any loan repayments, is £85K. This leaves you £10K short even assuming you do have £35K in savings for the deposit etc on the 75% LTV.

Edit: cross-posted with your reply above.

Yorkie1

Moneysaverchris wrote: »

yep got the deposit i saved it, thats the mortgage yes and not sure as there is 3 property's im potentially interested in. but all 3's rent would cover mortgage.

Do you mean you're applying for 3 mortgages?

Moneysaverchris

Yorkie1 wrote: »

A BTL house at £130K and 75% LTV will involve the following up front expenditure:

- deposit £32.5K GOT
- survey c.£500 Is free with deal
- sols fees c.£1K Zero my mum is sorting it.
- product application fee £xx Free with deal
- stamp duty £1.3K and yes have that too.

Do you have £35K+ available, or are you going for their only 90% LTV product?

On your other identical thread, you said that you had emergency savings of £6K, though it's not clear if that's after you've paid off the £7.5K loan (or £5K outstanding balance depending on which of your posts you read).

Their calculator says the max you can borrow on £20K, even without any loan repayments, is £85K. This leaves you £10K short even assuming you do have £35K in savings for the deposit etc on the 75% LTV.

Edit: cross-posted with your reply above.

Yorkie1 wrote: »

Do you mean you're applying for 3 mortgages?

Im applying for 1 mortgage not 3. i earn 30k the additional 20k doesnt count.

i have £7500 and £6000 savings
loan is 7500 leaves £6000.

is that easier?

Yorkie1

Moneysaverchris wrote: »

Im applying for 1 mortgage not 3. i earn 30k the additional 20k doesnt count.

i have £7500 and £6000 savings
loan is 7500 leaves £6000.

is that easier?

Apologies, had missed your salary was £30K not £20K.

Does NatWest know that a loan is making up part of the 10% deposit?

Even if they accept that over 50% of the £13K deposit comes from the loan, where will you fund the rest of the purchase expenditure from?

I'm really not trying to rain on your parade, but the figures don't seem to add up for the purchase, and I can't see that you have any resilience for the void periods, the unexpected expenditure (e.g. boiler needs replacing) which cannot be delayed because of your legal responsibilities.

kingstreet

A £130k property means you need a deposit of £32,500, leaving a mortgage requirement of £97,500.

The minimum rental income required for a NatWest mortgage is £97,500 x 7% = £6,825 / 12 = £569 x 125% = £711.

Do these figures sound feasible?

getmore4less

With all this money sloshing about why did you need a loan?

There is no such thing as registering for CGT.

IF you earn £30k and plan to get another £20k from other work better plan for 40% tax on the rental profits.

As above only interest and other expences are offsetable so any real surplus will get taxed at 40% is there still enough to cover the mortgage?

Moneysaverchris

Yorkie1 wrote: »

Apologies, had missed your salary was £30K not £20K.

Does NatWest know that a loan is making up part of the 10% deposit?

Even if they accept that over 50% of the £13K deposit comes from the loan, where will you fund the rest of the purchase expenditure from?

I'm really not trying to rain on your parade, but the figures don't seem to add up for the purchase, and I can't see that you have any resilience for the void periods, the unexpected expenditure (e.g. boiler needs replacing) which cannot be delayed because of your legal responsibilities.

kingstreet wrote: »

A £130k property means you need a deposit of £32,500, leaving a mortgage requirement of £97,500.

The minimum rental income required for a NatWest mortgage is £97,500 x 7% = £6,825 / 12 = £569 x 125% = £711.

Do these figures sound feasible?

getmore4less wrote: »

With all this money sloshing about why did you need a loan?

There is no such thing as registering for CGT.

IF you earn £30k and plan to get another £20k from other work better plan for 40% tax on the rental profits.

As above only interest and other expences are offsetable so any real surplus will get taxed at 40% is there still enough to cover the mortgage?

Okay i feel we are getting a bit confused here!
Right i have established now that i don't have to register for CGT.
My earnings are -
£30k primary
£20 secondary.
my savings are -
£7500 in one account
£6000 in a another
£40k in another. (all earn't by myself im proud to say)

Debts -
Loan outstanding £6900. - I took this out because i thought why not, wanted a nice car - got a loan and put some money towards it on a really low rate.

So is that easier?

getmore4less

Still missing the main parts of the business plan.

mortgage, size, interest rate, term, so monthly payment

estimated rent.

billchecker1

Why take out a loan and pay interest when you have 40k in the bank?