Buy to let mortgage & a 2nd regular mortgage

mary

My daughter & boyfriend want to get a buy to let mortgage, have enough for a £25K deposit, not yet found a property.

However, if in 3 or so years time they then find a house they would like to buy for themselves to live in, how are their finances affected with regard to getting a 2nd mortgage?

Is it advisable to do one in her name and the second in his or vice versa or it makes no difference?

They would be saving for the 2nd deposit in those intervening 3 years. Combined salary around £50K

kingstreet

If they plan to buy their first property and let the property from day one, they will need a BTL mortgage and there are only a couple of lenders who will lend to first time buyers on a BTL basis.

They'll need 25% deposit (more for newbuild flat) and their personal incomes will have to be able to meet the lender’s affordability requirements for a residential mortgage, so they can ensure they aren't using the BTL rules to get around residential affordability for a property they intend to live in.

When they decide to purchase a residence for themselves, there are lenders who will ignore the BTL in the background, as long as it’s self-financing. This means they won’t see their borrowing power reduced because of the BTL mortgage.

They will face restrictions on the loan to value on the purchase, with lenders treating their new home as a second property and reducing the maximum to 90%, perhaps even 85%.

mary

Do you know which two companies offer BTL for first timers?