Buy to let

Stebbers

My wife and I have a joint income of about £47k per year and are both 36. We have 14 years left on a repayment mortgage, still owing about £95k. Our house is worth about £130k. We are looking at getting a buy to let (you can still get 3 bed semis in the area we live for about £75k). My question is, do you think a bank would lend us the money for a buy to let, using some of the £35k equity that we have in our current home? We don't have any other debts apart from our mortgage and have about £4k of savings.

Foxy-Stoat_3

Probably not but you could always ask them to see their decision.

You will need £18-19K for the BTL property, so minimum you will need out of your current property is £15K, taking your LTV to 84%. You may be able to take out £9K if you pass the affordability.

amnblog

This will be tight and you may not get the lending as inexpensively as you may hope.

Your savings wont go far if your BTL is empty for any period.

A risky strategy.

dimbo61

A good idea would be to either save say £500/600 or £700 every single month for the next 12/18 months.
This builds up your savings and proves you can cover the BTL mortgage if the property you buy is empty for a period of time.
You need to show a business plan to any lender showing how much 3bed semi,s rent for in the area you want to buy and yield, profit, etc

jayson043

No, you don't have enough equity in your home. How much extra would you need to pay on your existing mortgage interest rate due to a worse loan to value ratio. Also your savings are too low, what happens if you need to find a big chunk of money when your buy to let finance deal ends for example.

mik82

As already pointed out, your £4k of savings will not go far if you encounter any problems, especially after all the fees.


In fact £4k of savings is not much at all given your combined household income, even without buying a BTL- how long would this last you if, say one of you was made redundant or became chronically ill?


Maybe build up some savings first, then if you really want a BTL save towards that.