Mortgages when unemployed

ChrisJB1968

I have been made redundant and am considering starting a buy to let portfolio. I am therefore currently unemployed and dont plan to work again. I have 700k equity in my house and am thinking of downsizing in order to give me a smaller mortgage free property to live in and then 300k spare to start of my property portfolio. My question is will I be able to get a BTL mortgage while unemployed. My monthly outgoings are only 500 a month as the rest are covered by my wifes part time job. We plan to use some of this spare 300k to live on while I am building up a portfolio to provide enough spare net rental income to cover this. I have done the maths going forward and my plan should work but my question is will I be able to get a BTL mortgage while unemployed and if so can I get one of the normal BTL products or will I have to pay a premium as I'm unemployed?

ACG

Yes but choice of lenders will be limited.

ChrisJB1968

Thanks for your reply. Would you be able to point me in the direction of which lenders would offer these or in the direction of independent brokers that specialise in this area?

Thrugelmir

Why not buy for cash initially. BTL is not without it's own risks.

amnblog

The only Lenders that might consider a situation like this will need to be accessed via a broker.

You can find one via unbiased.co.uk if you cannot get a recommendation.

ChrisJB1968

Thrugelmir wrote: »

Why not buy for cash initially. BTL is not without it's own risks.

I had considered this as a last resort if I couldn't get a good BTL rate, but my thoughts were that I I would then need to remortgage for the 3rd property after 6months ( when I believe I would be considered an experienced landlord and then not require any further proof of income) however remortgaging would incur more fees that I could save if I could get a BTL mortgage first time round.

ACG

I cant point you to specific lenders but you could speak to friends and family to maybe recommend a broker, have a look on google or unbiased.co.uk as amn suggests (there is a box that says sponsored listings only, best to remove that to give you more options).

Thrugelmir

ChrisJB1968 wrote: »

I had considered this as a last resort if I couldn't get a good BTL rate, but my thoughts were that I I would then need to remortgage for the 3rd property after 6months ( when I believe I would be considered an experienced landlord and then not require any further proof of income) however remortgaging would incur more fees that I could save if I could get a BTL mortgage first time round.

If none of the properties are unencumbered . Then your castle is built on sand foundations. Leveraging with debt is a double edged sword. Gains are magnified. However so are the losses. As you've no income to fall back on. To be regarded as experienced I'd several years of successful trading at least. In business you'll never stop learning.

ChrisJB1968

Thrugelmir wrote: »

If none of the properties are unencumbered . Then your castle is built on sand foundations. Leveraging with debt is a double edged sword. Gains are magnified. However so are the losses. As you've no income to fall back on. To be regarded as experienced I'd several years of successful trading at least. In business you'll never stop learning.

Many thanks for the advice. The downsized property would be unencumbered. I would not consider myself experienced in anything after only 6 months but I believe this is the definition of experienced used by most BTL lenders for the purpose of mortgage lending. Please correct me if I'm wrong. As stated earlier iIn order to live I need to make only 500 a month of my 300k starting fund. I don't believe that this is too hard to achieve with proper planning, and good business decisions. The aim however is not to make 500 a month as there are many to make a better return with less risk. My aim would be to make a minimum of 500 a month, while building up over the long term good capital gains for retirement in 15- 20 years. I also have a little experience in renovating my own house so plan to buy properties that need a little TLC before letting them out in order to add some value to them. My plan on paper seems to make good financial sense, and would enable me to work for myself while building up a retirement fund. The main challenge and a critical factor for me in order to initiate this plan and make this workable to the scale I planned seems to be finding financing at a good rate, hence my initial post for any advice or recommendations from those already experienced in this area. I hope this makes sense.