Options for first BTL

mikey_l

Hi,

I bought my first house in March of this year with a 5% deposit under the help to buy scheme. Since then I've had a promotion at work and had an extra bit of income coming in, which I'm saving.

I'm working towards getting a BTL as a future investment.

I have two questions and welcome any advice.

Firstly, what is the lowest LTV possible for a BTL?

Secondly, could I theoretically get a second residential mortgage with a smaller deposit (10% or whatever), move into that house and rent the first one out provided I could get consent to let?

G_M

1) You will normally need to put 25% towards your BTL. Lenders generally provide up to 75% (there may be exceptions - who knows?)

2) I believe Help To Buy properties are designed for owner-occupiers. I don't believe you will get CTL, and without it will be in breach of your mortgage and HTB terms.

Aditionally, there may be a requirement under the HT scheme that you maintain the property as your main residence (I don't know - check!), in which case you cannot move into the new property.

Thrugelmir

mikey_l wrote: »

Hi,

I bought my first house in March of this year with a 5% deposit under the help to buy scheme. Since then I've had a promotion at work and had an extra bit of income coming in, which I'm saving.

I'm working towards getting a BTL as a future investment.

I have two questions and welcome any advice.

Firstly, what is the lowest LTV possible for a BTL?

Secondly, could I theoretically get a second residential mortgage with a smaller deposit (10% or whatever), move into that house and rent the first one out provided I could get consent to let?

Focus on building equity in your existing property first, i.e. repaying the debt. As it's likely to be the best return (after tax) you'll earn for a while. As the LTV improves you'll be in a position to obtain better interest rates.

Plenty of time to get into BTL as your financial position improves in the future.

kingstreet

If you bought under HTB - Mortgage Guarantee, you'll be unable to purchase a BTL for seven years, or until you remortgage off the HTB scheme.

On a newbuild on HTB - Equity Loan, you have to repay the equity loan before you can purchase a second property.

mikey_l

Thank you all for your advice

kingstreet wrote: »

If you bought under HTB - Mortgage Guarantee, you'll be unable to purchase a BTL for seven years, or until you remortgage off the HTB scheme.

On a newbuild on HTB - Equity Loan, you have to repay the equity loan before you can purchase a second property.

Aah right, it was the Mortgage Guarantee Scheme. I wasn't aware there was a 7 year clause with BTL. Guess I'll keep saving for now then and see what happens.