Buy to Let Mortgage help!

Jason1412_2

I am looking for any useful advice on Buy-To-Let mortgages

Here is my situation:

I'm 21.
I currently have £5000 in savings.
I work full time, although on a 0 hour contract, i tend to do 30+ hours a month at work. My wages cover where I live just now as well as living costs.

Looking at flats around me to buy for let - they tend to go for £72,000ish at the moment.
This is for a 1 bedroom flat in a very nice area where I know, reasonably civilised (!) people stay and the rent would be guaranteed.

Walking into this situation completely blind at the moment - but I want to invest in property so that I don't end up spending my savings. Any advice would be appreciated - such as do I go for a interest-only or repayment mortgage? Insurances, etc?

Does anyone have any thoughts?

J

kels11

I am 21 too and was looking into this, I've been told you need a 20% deposit for a buy to let mortgage and on a 0 hour contract I doubt you'd get a mortgage. Would be interesting to hear if anyone knows more into this though.

I'm buying a now for myself and that's a struggle itself with a 10k deposit on a perm full-time contract, they seem to be questioning everything a lot more.

I'd like to buy another next year to rent out.

BitterAndTwisted

Buy-to-let mortgages generally require a 25% deposit and that the proposed rent is 125% of the mortgage-payments.

If you did have enough savings what would the yield be on that £72k property?

On a zero-hours contract what contingency-fund would you need to have to cover non-paying tenants/unexpected repairs and maintenance/void-periods?

00ec25

you need to forget your pie in the sky get rich quick idea and concentrate on getting a more secure (really) full time (ie 37 hours not 30) job

a buy to let mortgage requires:
a) that you already have a mortgage on a residential property, you will find it very difficult (ie very few and more expensive rate) to get a BTL if you do not already own another property

b) you will need a minimum deposit of 25% of the purchase price. You have 5k that means the most you could buy is a property priced at 20K (ie a 15k mortgage plus 5k deposit). Many lenders would not do a mortgage for such a low figure anyway so another reason why your idea is very premature, you cannot afford to do this as you do not meet the qualifying criteria. What extra cash you have on top to pay the legal fees and other buying costs is another matter...

c) the monthly rental income must be at least 125% of the interest payment assuming a (notional) 6% interest rate

kingstreet

You'll only get income from a zero hours contract taken into account when you've been on one two years and can evidence it, perhaps using your P60s.

As mentioned, you need 25% deposit, the rent to be 125% of the monthly mortgage interest assuming a rate of perhaps 6% and you'll have a limited pool of lenders if you do not already own a home.

Expect pointed questions as the lender will assume you are going to buy the property and live in it and are trying to get around the residential mortgage evidence of income rules; which will look even more likely on a zero hours contract...

wabbitpoo

Jason1412 wrote: »

I work full time, although on a 0 hour contract, i tend to do 30+ hours a month at work.

30 hours a month??:eek:

that's not exactly full time...was it a typo?