Student buying a house to rent?

kzzhar0

aneary wrote: »

What happens if the mortgage payer at your home loses their job? Can you afford the mortgage and the mortgage on your BTL property if there is a void?

Do you have the time to be a LL?

Also have you factored in that if you are on the mortgage (I assume the deeds too) you will have to pay the extra 3% stamp duty.

These are all questions which I need advice on and why I started this post - I stated that I am new to all of this which is why I need advice!
No I hadn't factored that in as I am new to all of this as I've written on the original post.

kzzhar0

hazyjo wrote: »

Student loan is a loan (clue is in the name ). Lenders won't accept a borrowed deposit.


The loan is given to you to use to live on - what do you propose you'll use if the loan was able to be used as a deposit?


You can't just 'get on a mortgage'. You have to qualify and it doesn't sound like you would.

I currently live off my wages. I'm not expecting to just 'get on a mortgage' I've spoken to an advisor who gave me this advice.
How do lenders know its a borrowed deposit thought if its combined with my savings that I already have?
Once I graduate next year, if my hours are upped to full time/I find a job in my studied field then will this not count for something? Like I already said, this isn't something I am doing right now (I'm too busy with studying/working) but something I want to look into for next year.

kzzhar0

Thanks for all the helpful responses, at least I have a vague idea of whats what now.

Cyclizine

kenzam90 wrote: »

Once I graduate next year, if my hours are upped to full time/I find a job in my studied field then will this not count for something?

I think the important word here is 'if'. Lenders like certainty.

davidmcn

kenzam90 wrote: »

How do lenders know its a borrowed deposit thought if its combined with my savings that I already have?

By looking at your bank statements to see where your funds have come from.

kzzhar0

Cyclizine wrote: »

I think the important word here is 'if'. Lenders like certainty.

Obviously yes, but I would know that for certain next year when it happens. Again, like I said, this is something I was thinking about maybe doing next year.

Probably doesn't look likely now though, there seem to be too many negative responses on here for me to think that its a good idea.

Marvel1

Unless it's changed, the student loan was paid to me by 3 instalments: September, January and April.

Can you pay for a new boiler?

What about missed rent payments? Void periods in between finding new tenants?

saajan_12

To let the property, you'd need a BTL mortgage.. this would probably fail at just about every hurdle:

1) Deposit- lender would ask for proof of source of funds - this can't be a loaned deposit, and they'd see the entry with the money from SLC.

2) 25% deposit for BTL plus money for solicitors, mortgage fees, surveys, stamp duty..

3) Need to already own a home - to be 'added to someone else's mortgage' you'd need to pass affordability for that on your income (excl overtime, future pay etc). Plus you'd be liable for higher rate stamp duty at an extra 3% when you buy the BTL.

4) Expected rent >125% of higher BTL interest rates

5) Age > 25 for many lenders (student suggests more likely to be young..)

6) Can you afford to pay mortgage during rental voids, repairs?

If you were to live in the property instead and took in lodgers for the other rooms, many of the above requirements aren't necessary but you then need to pass affordability on your income only, without counting rent. Also, your expected rent would reduce as you'd be using one room and your living costs (e.g food, bills) would increase living away from home).

All in, a non starter. Didn't you wonder why everyone wasn't doing it if it was so easy?

kzzhar0

saajan_12 wrote: »

To let the property, you'd need a BTL mortgage.. this would probably fail at just about every hurdle:

1) Deposit- lender would ask for proof of source of funds - this can't be a loaned deposit, and they'd see the entry with the money from SLC.

2) 25% deposit for BTL plus money for solicitors, mortgage fees, surveys, stamp duty..

3) Need to already own a home - to be 'added to someone else's mortgage' you'd need to pass affordability for that on your income (excl overtime, future pay etc). Plus you'd be liable for higher rate stamp duty at an extra 3% when you buy the BTL.

4) Expected rent >125% of higher BTL interest rates

5) Age > 25 for many lenders (student suggests more likely to be young..)

6) Can you afford to pay mortgage during rental voids, repairs?

If you were to live in the property instead and took in lodgers for the other rooms, many of the above requirements aren't necessary but you then need to pass affordability on your income only, without counting rent. Also, your expected rent would reduce as you'd be using one room and your living costs (e.g food, bills) would increase living away from home).

All in, a non starter. Didn't you wonder why everyone wasn't doing it if it was so easy?

If you read my original post carefully, you'll see that I said I'm new to all this so wanted some help and advice. All of the above is really useful so thanks but it was just a thought I had so thought I'd get some advice off people on here first so no I didn't think about why people weren't doing it.

[Deleted User]

I assume you are thinking of renting out rooms? Otherwise you will not have enough to pay a mortgage back (assuming part time pay is not enough).

If you have 'other income' like rent, I believe you will find your student loan amount reduced if not gone.

And has already been pointed out, you will surely know by now that the loan is paid termly.., not all at once so you'd have to wait 9 months.