LTV Question (10% vs 5% with Let to Buy)

stu2500

Hi, as per my previous posts, myself and my partner are aiming to purchase a house early next year but keep her flat on as a let to buy once we secure our new home.

We have savings for stamp duty and are nearly there with our 5% deposit (which we've saved ahead of time). We have some o/s credit card balances of around £6,000 (interest free and no missed payments etc), she pays £190 car finance and I pay £197 per month on a loan. Our credit files are all very good and well maintained. She earns £30k per anum and I earn £21k basic and aprox £10k commission per year (I'm hopeful of a pay rise to £25k in October too).

Due to the complicated matter of the let to buy, would we have a lot more choice regarding mortgage deals if we had a 10% deposit? I have been advised 2-3 companies will offer mortgages in this situation with 5% deposit, but if we could save some extra, would we be much better off regarding choice of deals?

kingstreet

Yes.

Bigger lender pool and better rates.

stu2500

kingstreet wrote: »

Yes.

Bigger lender pool and better rates.

Thanks, I'm starting to think it might be better to save the extra for 10% as it won't take much longer.

amnblog

Are you dealing with a Broker Stu?

You will have a number of complications in getting a mortgage to run alongside a L2B with that level of deposit.

AnotherJoe

stu2500 wrote: »

Hi, as per my previous posts, myself and my partner are aiming to purchase a house early next year but keep her flat on as a let to buy once we secure our new home.

We have savings for stamp duty and are nearly there with our 5% deposit (which we've saved ahead of time). We have some o/s credit card balances of around £6,000 (interest free and no missed payments etc), she pays £190 car finance and I pay £197 per month on a loan. Our credit files are all very good and well maintained. She earns £30k per anum and I earn £21k basic and aprox £10k commission per year (I'm hopeful of a pay rise to £25k in October too).

Due to the complicated matter of the let to buy, would we have a lot more choice regarding mortgage deals if we had a 10% deposit? I have been advised 2-3 companies will offer mortgages in this situation with 5% deposit, but if we could save some extra, would we be much better off regarding choice of deals?

Does that include the extra 3% SDLT because you will be buying a second property?

Just out of interest, how many years rental profits does that equate to and does that still make keeping the existing flat as a BTL financially viable?

stu2500

AnotherJoe wrote: »

Does that include the extra 3% SDLT because you will be buying a second property?

Just out of interest, how many years rental profits does that equate to and does that still make keeping the existing flat as a BTL financially viable?

Yes, we have the extra 3% stamp duty as well as the 5% deposit.

Sorry, I'm a little lost off with what you mean about the rental profits?

stu2500

amnblog wrote: »

Are you dealing with a Broker Stu?

You will have a number of complications in getting a mortgage to run alongside a L2B with that level of deposit.

Yes, we are definitely using a broker. There are too many factors to consider for us to do on our own.

I'm a little concerned at the 5% deposit and the fact we may need 10%. It just means we need to save for longer that's all.

stu2500

AnotherJoe wrote: »

Does that include the extra 3% SDLT because you will be buying a second property?

Just out of interest, how many years rental profits does that equate to and does that still make keeping the existing flat as a BTL financially viable?

Hi, sorry, I think I know what you mean now. We won't really make any profit on the rent, it will probably match up with the mortgage payment each month. But we don't want to sell as we would like to keep it as a BTL once the mortgage is paid off (15 years). Thanks.