BTL Mortgages

WG0608

I think BTL is risky with anything less than a 25% deposit.

Socksey

WG0608 wrote: »

I think BTL is risky with anything less than a 25% deposit.

Definitely agree with this.... can you save for a little while longer?
I have a broker who I've used for a number of purchases and so have a good relationship with and I am able to take the risk on this particular 80% LTV... remember the rates etc will be higher than at 75%.... I have a tenant ready to move in and the market rent is sufficient to make this a good investment long term and I have enough equity elsewhere and cash flow elsewhere to deal with voids... you must plan for these, especially at the beginning as it could be a few months before you get a tennant in.

Within your calulations you need to factor in, not just the mortgage cost but all your purchasing costs.... a few months at the beginning where you have no tenant and will have to pay the mortgage yourself... also you may need to give the place a clean/redecorate... you need to pay for the gas and electric certs and council tax while the place is empty and also marketing costs if you are using a letting agent (which has its benefits unless you have the time and background to be chasing stuff)

A good broker can be found via word of mouth... if your friend haven't used one, maybe they know someone who has... I've used a numebr of different ones in the past and some are excellent and some are absolutely awful...

saveruk_2

Socksey wrote: »

Definitely agree with this.... can you save for a little while longer?
I have a broker who I've used for a number of purchases and so have a good relationship with and I am able to take the risk on this particular 80% LTV... remember the rates etc will be higher than at 75%.... I have a tenant ready to move in and the market rent is sufficient to make this a good investment long term and I have enough equity elsewhere and cash flow elsewhere to deal with voids... you must plan for these, especially at the beginning as it could be a few months before you get a tennant in.

Within your calulations you need to factor in, not just the mortgage cost but all your purchasing costs.... a few months at the beginning where you have no tenant and will have to pay the mortgage yourself... also you may need to give the place a clean/redecorate... you need to pay for the gas and electric certs and council tax while the place is empty and also marketing costs if you are using a letting agent (which has its benefits unless you have the time and background to be chasing stuff)

A good broker can be found via word of mouth... if your friend haven't used one, maybe they know someone who has... I've used a numebr of different ones in the past and some are excellent and some are absolutely awful...

Thanks for your advice. I completely understand all of the additional costs, I have a long list of all the things we would have to cover (which does worry me a little but I guess that's with all houses).


Forgive my naivety, but why is it risky to have less than 25% deposit - is this because product rates are higher? or because of the fear that house prices may fall?


We are looking to do this obviously for a long term return and could save longer - I just wanted to make the most of the current mortgage rates.


Thanks again

saveruk_2

Any experience of Legal & Country? That name crops up a lot on here

amnblog

London & Country - and you wont find much good press on here.