First time buyer unsure of diff. mortgage benefits

gll5dm

Hi everybody,

I've saved 30.000 pounds and would like to invest the money in property.

I'll be leaving the UK at the end of the year so will look to get a regular mortgage as I'll be living in the property for a good six or seven months before leaving, and from what I've read changing circumstances in this way doesn't require a new mortgage agreement (hence why buying it now with a regular mortgage but fully intending to end up renting it).

Now I'm looking for a little advice as I've been hearing all sorts about help to buy vs regular mortgage. Bearing in mind this will ultimately turn out to be a long-term investment and I have enough money to put down a substantial deposit now (15% - the property itself costs 119.000 pounds), can anybody please suggest what type mortgage I should be aiming for?

I understand help to buy gets you a bigger deposit to put down, but the downside I hear is that you end up paying more back if, as expected, the price of the property increases. So I am thinking just a regular mortgage is more suitable seeing as I can afford a good deposit.

If I was prepared to put 10% down on the property instead I could directly purchase two and really kick off my property-owning portfolio! My 30.000 pounds would easily cover 10% deposit for two 119.000 pounds homes.

If you were in my shoes, what would you plump for, any why?

Thank you

juniordoc

Not all lenders will give you consent to let so I would look into which lenders are likely to and see which mortgages they offer.
10 or even 15% is not a substantial deposit for a property you aim to let.

gll5dm

juniordoc wrote: »

Not all lenders will give you consent to let so I would look into which lenders are likely to and see which mortgages they offer.
10 or even 15% is not a substantial deposit for a property you aim to let.

I won't be asking permission to let.

On a 119.000 pounds property I think 17.850 pounds (15%) is a pretty decent deposit, no?

Thrugelmir

gll5dm wrote: »

I'll be leaving the UK at the end of the year so will look to get a regular mortgage as I'll be living in the property for a good six or seven months before leaving, and from what I've read changing circumstances in this way doesn't require a new mortgage agreement (hence why buying it now with a regular mortgage but fully intending to end up renting it).

Failure to disclose material facts at the outset is a material breach of contract, i.e. fraud. The lender can seek a remedy without recourse.

gll5dm

Thrugelmir wrote: »

Failure to disclose material facts at the outset is a material breach of contract, i.e. fraud. The lender can seek a remedy without recourse.

Nothing will be set in stone by the time I arrange a mortgage. I'll be living and working in the UK, for at least the first six months of owning the house.

scottishblondie

gll5dm wrote: »

I'll be leaving the UK at the end of the year so will look to get a regular mortgage as I'll be living in the property for a good six or seven months before leaving, and from what I've read changing circumstances in this way doesn't require a new mortgage agreement (hence why buying it now with a regular mortgage but fully intending to end up renting it).

gll5dm wrote: »

I won't be asking permission to let.

If you rent out a property that has a residential mortgage attached to it, you need to ask the lender for their permission. Not to do so would be remarkably daft, and completely against the terms of the mortgage. You are also clearly attempting to defraud the lender, as you are taking a residential morgage with no intent of living in the property for more than a few months. Gaining consent to let in these circumstances is unlikely to go well.

gll5dm wrote: »

Now I'm looking for a little advice as I've been hearing all sorts about help to buy vs regular mortgage. Bearing in mind this will ultimately turn out to be a long-term investment and I have enough money to put down a substantial deposit now (15% - the property itself costs 119.000 pounds), can anybody please suggest what type mortgage I should be aiming for?

You cannot rent out a property that has been purchased using a HTB equity loan, so forget that.

gll5dm wrote: »

If I was prepared to put 10% down on the property instead I could directly purchase two and really kick off my property-owning portfolio! My 30.000 pounds would easily cover 10% deposit for two 119.000 pounds homes.

gll5dm wrote: »

On a 119.000 pounds property I think 17.850 pounds (15%) is a pretty decent deposit, no?

Putting aside the residential mortgage fraud, you would need a BTL morgage on the second property as no lender would give you a second residential morgage in these circumstances. 10 or even 15% would be an insufficient deposit for a BTL mortgage as they mostly require a 25% deposit but at minimum 20%.

gll5dm

scottishblondie wrote: »

If you rent out a property that has a residential mortgage attached to it, you need to ask the lender for their permission. Not to do so would be remarkably daft, and completely against the terms of the mortgage. You are also clearly attempting to defraud the lender, as you are taking a residential morgage with no intent of living in the property for more than a few months. Gaining consent to let in these circumstances is unlikely to go well.

No worries about that, everybody does it. Circumstances change. I know I want to live abroad in the future, does that mean I am banned from getting a residential mortgage now? I do not think so. Maybe not getting back in touch with the lender to let them know of changing circumstances would be a little naughty, but many many people do the same so no concerns on that for me.

scottishblondie wrote: »

You cannot rent out a property that has been purchased using a HTB equity loan, so forget that.

I guess same as above.

scottishblondie wrote: »

Putting aside the residential mortgage fraud, you would need a BTL morgage on the second property as no lender would give you a second residential morgage in these circumstances. 10 or even 15% would be an insufficient deposit for a BTL mortgage as they mostly require a 25% deposit but at minimum 20%.

Makes sense regarding second house. I think I'll stick to the first one for the time being.

jackandcoke

gll5dm wrote: »

No worries about that, everybody does it. Circumstances change. I know I want to live abroad in the future, does that mean I am banned from getting a residential mortgage now? I do not think so. Maybe not getting back in touch with the lender to let them know of changing circumstances would be a little naughty, but many many people do the same so no concerns on that for me.


I guess same as above.


Makes sense regarding second house. I think I'll stick to the first one for the time being.

Obvious troll is obvious. or. Obvious idiot is obvious

kingstreet

HTB Equity Loan is newbuild only, and you give no indication that is what you are looking to purchase.

You cannot let a HTB property.

gll5dm

jackandcoke wrote: »

Obvious troll is obvious. or. Obvious idiot is obvious

Explain?

Do you think thousands of people do not do exactly the same? By that I mean take a residential mortgage out with the intention of renting out the home. Are you that naive? Or are you just on your high horse?

But yes, clearly a troll, cheers.

gll5dm

kingstreet wrote: »

HTB Equity Loan is newbuild only, and you give no indication that is what you are looking to purchase.

You cannot let a HTB property.

I don't think I'll go down the HTB route as, from what I have understood, a much bigger amount will need to be paid back if the house price increases significantly.

I think HTB is great for people who genuinely cannot put a bigger deposit down and have ambitions of living in the house themselves.