Buy to let mortgage

Cupcake85

My mother has been left some money and would like to invest it in a buy to let, the value of the house would be about £95,000 and a deposit of 15% so a 85ltv buy to let mortgage would be needed.

Is there many lenders out there who would lend? She doesn't want to waste her time viewing the property etc without knowing this is actually a possibly.

I done a quick Google and couldn't see any 85% ones they were mostly 60/70 ltv

She is 56 works full time and still has a mortgage on her own home.

AnotherJoe

Non starter. Minimum 25% deposit.
She most likely wouldn't make any money on it anyway.
Have you seen the financial analysis she's done to show what profits she would make?
Is she aware of all the costs and legal duties?

Cupcake85

She has not done any financial analysis as we wanted to know if the idea was even possible with 15% before she started to look deeper into things

amnblog

There are BTL Lenders that will work with 15% deposit.

Mum needs to own her own home (with or without a mortgage) to access these Lenders.

AnotherJoe

amnblog wrote: »

There are BTL Lenders that will work with 15% deposit.

Mum needs to own her own home (with or without a mortgage) to access these Lenders.

So it's not a government restriction that BTLs must have 25% minimum deposit then? Fair enough I stand corrected.

amnblog

Not sure when the Government Restriction rumour came from Joe.

Over 75% is not common but is available, the major barrier being that the rental often is insufficient.

AnotherJoe

amnblog wrote: »

Not sure when the Government Restriction rumour came from Joe.

Over 75% is not common but is available, the major barrier being that the rental often is insufficient.

When all lenders (as I erroneously thought) had that requirement, I thought it was therefore a government requirement part of the same package as extra SDLT and so on.

So, as it's not a government requirement, why is it that most have that same 25% figure ? You might expect that it would be as variable as deposit requirements for residential.

amnblog

Most of the BTL market is still unregulated.

In any market there are lenders that will offer a little more flexibility for a premium on pricing. +75% is an example of that.

ACG

There are a couple of 80% lenders.
As far as im aware there is only 1 lender who will do 85% LTV for BTLs.

getmore4less

What rent will the property get?

£95k with 85% LTV you would be looking at around £350pm to just cover the interest, more like £550 to have any chance of breakeven/profit, more like £650 to make it a viable letting business.

10% gross yield used to be the benchmark before lending got so cheap and that would be close to £800

Cupcake85

The estate agent said the rent should be about £500 per month, my mother is not in it for a profit she is looking for a long term gain