Extra lending question

kingstreet

It sounds like the property may not be in readily-lettable condition (required by the bulk of the lending market) and as amn alluded to, the property may not be in current ownership for six months, causing issues with some lenders.

Then we have the PRA rules and also personal affordability issues which also have to be taken into account.

This is going to need a lot of work for a decent broker.

thecakelady

amnblog wrote: »

Where did the idea to use Virgin money come from?

Whose name is the property in currently? If your husband's, when did it go into his name?

I did a search for Buy to Let mortgages and Virgin money was the one that came up with the best rates.

The property is now in my husband's name, the Title Deeds were changed about a month ago.

thecakelady

getmore4less wrote: »

If it only needs a couple of £k do the work on a 0% purchase CC and get the rent coming in.

Running 2 houses and having no savings is a very risky strategy.

Has hubby any experience of being a landlord and understand all his legal responsibilities?

there is a lot to do before the first tenant moves in.

what rent will this place get?

The decision to let the house was made because my husband doesn't want to sell the property (a. because its been in the family for so many years and b. because once its sold its gone, he was hoping to get some income from it and keep it for an investment for the future that can be sold when he chooses).

No my husband doesn't have any experience of being a landlord but yes does understand his responsibilities, has taken advice, has an agent in place when the house is ready.

Monthly rent will be about £700.

My husband's view is that if renting it out isn't successful he will sell the house so doesn't feel its a risk.

thecakelady

csgohan4 wrote: »

can you swallow void periods when no tenants insitu or when boiler breaks or roofing needs repairing.


What about eviction costs when tenants refusing rent? could cost thousands


Are you sure your ready to be a LL??? there are tax and legal implications and are you aware of the new tax rules coming in April 2017???


Renting is not a money making machine anymore

In regards to your request to borrowing money from the same bank, loyalty doesn't pay now a days, and your supposed to pay your mortgage, there are no rewards for doing something your supposed to do legally and bound in contract.


Try borrowing elsewhere, but without savings your exposing yourself to the mercy of paying tenants.

Yes we are aware of the tax and legal implications and the new tax rules, had looked into all that before making the decision to rent.

Honest answer, I'm not sure whether my husband is ready to be a Landlord but he doesn't want to sell the house but and I agree, there doesn't seem any point in having an empty house sitting there not earning an income.

Its not like we want to borrow hundreds of thousands to buy the property, it has no mortgage on it, we have a very low mortgage on our own property but no ready cash to do the small amount of work needed.

My point about always paying our mortgage (and other bills) is that we have a good credit score so do not understand their reluctance to lend more to us.

getmore4less

The problem is buy having no cash on hand the risks are going up a lot.

You really need to put together a business plan and work through some numbers to make sure you borrow an initial amount that mitigates the risks.


£700pm is low for a £200k house

thecakelady

sounds like a plan, if we can borrow the money!

getmore4less

thecakelady wrote: »

My point about always paying our mortgage (and other bills) is that we have a good credit score so do not understand their reluctance to lend more to us.

Income, age and affordability are the usual measures

Lack of savings often means not a lot of spare cash flow to fund more debt.

thecakelady

rtho782 wrote: »

If he doesn't want to sell it he could always keep it empty I guess?

So, as you will put aside money for repairs (or at least you plan to, who knows what will actually happen), it's all fine as long as nothing major breaks during the first 6-12 months of your first tenancy.

If the boiler breaks before then, the poor tenant will just have to live in the cold with no hot water. If the roof collapses, they will just have to use an umbrella.

Or perhaps they could sue you and take the house you want to keep.

I don't want to sound mean but you have a £7k mortgage and the bank won't lend you £5-10k more, which suggests your income is so low that you really have no cushion whatsoever if anything goes wrong.

If you really want a rental property you'd be much better selling the £200k property, buying a £125k one to let, and having a nice big £75k cushion.

My husband does not have a great desire to be a landlord but doesn't want to sell the house (once its gone its gone) but didn't want it to be sitting empty either hence the decision to rent

dharper81

Could you not take a personal loan?

£10,000 @2.9% with Sainsburys will be £179 a month for 60 months.

You could even pay the balance faster with the remainder of the rental receipts.

Why is the existing lender refusing to lend more? Do you have bad credit history/missed payments etc?

silvercar

thecakelady wrote: »

My husband does not have a great desire to be a landlord but doesn't want to sell the house (once its gone its gone) but didn't want it to be sitting empty either hence the decision to rent

I'd consider whether he would be happy with tenants who were not as respectable to the property as he would like them to be. Sounds like he is too emotionally attached to the place to be comfortable with letting strangers consider it their home.