flying solo requesting help!

flying_solo_2

Hi everyone i'm hoping somebody can help answer what i thought were straight forward questions from a novice seeking advice regarding the cans and can'ts of buy to let mortgages,mortgage providers bamboozle me with everything but the answers leaving me feeling stupid for asking them....MAYBE I AM? but im not going ahead with my meeting with a mortgage advisor now until i have more information because im embarrassed!!! I am being made redundant soon and wish to explore other options 1 of those being 'rescuing' tired old houses for a modest living/rewarding hobby (NO GREAT EXPECTATIONS and no desire to become a landlord) QUESTIONS:

1) can i get a buy to let mortgage on a house that needs a little tlc and be free to sell it or would it be a condition of the mortgage that its let?
2) I'm fortunate enough to have paid the mortgage on my home but without income would be unable to re-mortgage to raise funds..Could i get a buy to let on my home using the equity as deposit and still live there/let to myself? Please help shed some light on the validity of these(stupid?) thoughts.

Doozergirl

A buy to let needs to be let It will be a condition of the mortgage. They ask for a copy of the tenancy agreement

I wouldn't spend that much money looking for a 'modest' profit, let alone a hobby.

If you want to do it, then sell up, buy somewhere new with proper cash and do it up gradually.

alona1

There is a type or mortgage that you can get that covers you for a short term while you do what you need to do, but they are at a higher interest rate. Cant remember what they're called though.

Conrad

Here's the answer;

Some amateur developers 'use' a B2L mortgage but have no intention of letting. Many lenders will not require site of a tenancy agreement - in fact Ive only come accross them asking once.

What you want is a variable rate - lenders uses silly terms like tracker but dont let this confuse you, essentially all you want is;

1) The most competetive variable / tracker / disconted rate
2) No early repayment charges

A few points:

1) Some lenders will want evidence you are earning
2) Make sure the deposit is at least 20% to get best deals - and easier criteria
3) Make sure you have enough money to survive at least 12 months. Many a would be developer allows 6 months and then the buyer pulls out at the last second
4) UNDERSTAND MONEY; These TV property shows are misleading - they fail to factor in the 'COST OF BORROWING THE MORTGAGE AND THE DEPOSIT",. After allowing 12 months mortgage payments will you still be in profit?

Good luck, youre gonna need it!

Conrad

PS - Of course you need to make sure you can cope with a variable rate that may well go up.

Conrad

PPS - I am not recommending you do this, just pointing out how some developers manage to raise finance at competetive rates. The alternative is high rate development finance limited to about 70% ltv - 2 lenders do this with no proof of anything but trying to make a profit on the back of such rates is really very difficult.

flying_solo_2

:j Thank for all replies but especially to Conrad for the answers that confirm i'm not so stupid and also still retain some common sense,i share his thoughts and concerns regarding potential pitfalls and do indeed understand money and the evils surrounding it! I was quite sure that if my intention was to repay the B2L mortgage from the sale of the house (on completion of the works) then theres no longer any conditions to honour :cool:
With respect Doozergirl selling my house is obviously a no brainer to you but when you love your HOME and you've successfully come through the other side of being a single parent of 2 young children dumped 2yrs into the marriage and mortgage during the time of massive int rate rises and neg equity (whilst working full time without financial support from husband or state and with a husband begging to be released from it) then you may understand why selling up is not an option..Furthermore i'm not driven by greed so modest profit from a hobby that could be rewarding on many levels(not just financially)would satisfy me especially now that my children are no longer dependents...I appreciate i must be a dying breed thats so easily satisfied and you wouldn't do this but "each to their own" i say.:beer:
Incidentally i'm not 40 yet so still life in this old dog yet!! Worst case scenario i'd have to get a proper job and earn proper cash again!!!!!!!

silvercar

Pop over to singingpig.co.uk, a forum full of property investors, some sensible and some with their heads in the clouds.

flying_solo_2

Thank you silvercar..Which category would i be suited to in your opinion? BE HONEST PLEASE constructive criticism welcome..;)

Doozergirl

flying solo, you specifically pm'ed me to ask for advice. I had no intention of answering at all until you asked

A decent potential profit margin protects you from negative equity. It has nothing to do with greed, more good business practice and less risk of losing your own home and more hope of keeping your family protected.

If you want a hobby, I'd suggest taking a class, not renovating property where you are far more likely to lose than gain initially.

flying_solo_2

Doozergirl i pm'ed you to specifically ask you to read my thread since i'd read lots of yours and felt you may be able to help answer my questions i didn't ask for your advice since i doubt you'd be qualified to give it..if you were you'd be aware of the implications in using the word!
" A decent potential profit margin protects you from negative equity. It has nothing to do with greed, more good business practice and less risk of losing your own home and more hope of keeping your family protected."
REALLY!! HOW ON EARTH DID I GET THROUGH NEGATIVE EQUITY WITHOUT LOSING MY HOME AND SUCEED IN KEEPING MY FAMILY PROTECTED AND ACHIEVE 100% EQUITY WITHOUT YOUR "ADVICE" :rolleyes:
Maybe you should take a class in REAL LIFE situations as i did and see if you lose or gain!!!
I no longer feel so stupid sinse even i know the difference between renovating a property and giving it a little tlc :rotfl:
I DO SO LIKE YOUR SIGNATURE:rolleyes: ME THINKS PRACTICE WHAT YOU PREACH!