Can we get a buy to let mortgage to move into at a later date, and avoid stamp duty?

AdrianC

saajan_12 wrote: »

1. Fiance getting a BTL mortgage with only 20% deposit and not already being a homeowner. This will reduce the pool of lenders, so she won't get the best interest rates.. so factor the extra interest in the costs compared to just paying the SDLT

Oooh, I'd missed that %age. That's going to be a showstopper, I'd have thought.

3. Few lenders will consider a gifted deposit from someone living in the property

True, but they won't be living there - this is the BtL...

kingstreet

andy230uk wrote: »

my fianc!e to buy the second property on her own

This all hinges on her being able to afford this on residential affordability terms.

If she can't, it's a non-starter.

Any lender willing to offer BTLs to non-homeowners tests affordability on a residential basis to make sure the applicant isn't buying s property to live-in while using the BTL affordability rules to "game" the system.

TBH with many lenders (under the new PRA rules) insisting the rent must be 145% of the mortgage interest at an assumed rate of 5.5% per annum, the gap between residential and BTL affordability must be narrowing.

AdrianC

In fact, the more I think about the sums, the more I think the BtL mortgage for her alone is going to be a non-starter...

80% LtV
Not an existing property owner
4.6x income

What's the likely rent? Unless rent's over £1,500/mo, you're going to be struggling for 125%, based on 5% APR repayment.

And is it even worth it?

Let's say it's £1,500 rent. After basic rate tax, that's only £30/mo over the likely mortgage repayment. That's not a lot of headroom for costs. She's going to be damn near subsidising the tenants, and that's before any rate rises, voids, big bills...

If we go for 145% at 5.5%, you'd need damn near £1,800/mo rent, although that does at least leave £200 clear between rent and repayment after tax, but before other costs. Assuming you self-manage. 10% management fee's going to take that straight back to pocket change.

Marvel1

dirtycredit wrote: »

Even these experienced landlords were new landlords once. Get a grip!

Who did research first I assume and were not "accidental landlords".

I'm not a landlord but only know some basics from being here, and would not consider as not worth the hassle and work involved.

My mate is a landlord, he didn't protect deposit and flat was damaged, result: he had to return deposit.