Advice on Buying to Let?

C-mitchell

Hi, I'd like some advice on how to move forward into buying a second property. My girlfriend and I have been fortunate enough to buy a flat in London using the help to buy scheme. In which we have a mortgage and an Equity Loan. I am considering the best way for us to pay back our help to buy equity loan. Since purchasing our home which we are very happy with I wondered whether it would be possible, ethical or even legal for us to get a buy to let mortgage on another property or properties (if it became possible for us to do so) in order to help us pay back the equity loan faster. Or are our hands now tied? I'd like your thoughts and ideas... Am I barking up the wrong tree? Thanks, Christian

mije1983

Can you afford another mortgage? If so, then surely you can easily afford to save the money to pay off the loan in the required time without jumping through the hoops of being a LL, along with all the associated risks?

You also usually need a substantial deposit (quite often 25%) for a BTL mortgage. Which again, if you already have, would be easier to just put towards paying off the loan.

00ec25

why not read the rules for the HTB equity loan scheme first and save yourself time in wasted speculation?

Q: Can I own a Help to Buy home and buy a second home?
A: https://www.helptobuy.gov.uk/equity-loan/faq/#860d20ea-e1f7-648f-8ce9-ff0000ad17aa

Gspree

I too bought a flat last year and have an equity loan on the property. Unfortunately you can!!!8217;t get a BTL mortgage of any kind until you have paid off the HTB equity loan

Your best bet is to save and pay it off ASAP either all at once or in two separate 10% chunks (assuming yours makes up 20% of the value of your property too).

You!!!8217;ll then be able to look at getting a BTL mortgage. I!!!8217;m in the South-East and due to changes in the rules to stamp duty on 2nd properties (ie you pay a % on the entire property price) and a few other dissincentives - I!!!8217;m hopefully going to find a BTL property further afield, in an area where prices seem lower and maybe have more potential/lower fees.

I can only imagine for you, being in London, that local prices might be even more astronomical!

anselld

00ec25 wrote: »

why not read the rules for the HTB equity loan scheme first and save yourself time in wasted speculation?

Q: Can I own a Help to Buy home and buy a second home?
A: https://www.helptobuy.gov.uk/equity-loan/faq/#860d20ea-e1f7-648f-8ce9-ff0000ad17aa

... or just read the answers in your previous thread.
https://forums.moneysavingexpert.com/discussion/5842156/buy-to-let-second-property-on-with-first-house-on-help-to-buy

Yes OP, you are barking up the wrong tree and asking the same question repeatedly is not going to change that.

Gwendo40

Remarkable how the financially illiterate still think that BTL is the path to easy, untold riches.

C-mitchell

Thank you for your time and I realise I!!!8217;ve reworded and repeated the question but it has given me some clarity moving forward. Untold riches is not what I!!!8217;m getting at here and thank you Gspreee for sharing your experience. Most helpful!

In response, I!!!8217;ve read the help to buy Q&A I just wanted clarity.

Mije thank you for your useful input, I just wanted to know whether it was an option. The equity loan is 40% Of our property so more than a deposit for what we would look to BTL.

I!!!8217;m asking for Advice and thank you to those that have given it.

steampowered

Once you have built up enough equity or savings to cover a 10-15% deposit, you can remortgage the rest of the equity on commercial terms.

The remortgage could be used to pay off the equity loan.

00ec25

C-mitchell wrote: »

I've read the help to buy Q&A I just wanted clarity.

define clarity? Could it be the first 2 lines of the HTB FAQ whose link you were given in your previous thread and again in my post above?

Can I own a Help to Buy home and buy a second home?

No. If you can afford to purchase another home you will have to repay the Help to Buy: Equity Loan.

The property purchased must be your only residence. Help to Buy is not available to assist buy-to-let investors or those who will own any property other than their Help to Buy property after completing their purchase.

You cannot rent out your existing home and buy a second home through Help to Buy.

Applicants who make fraudulent claims for Help to Buy assistance will be liable to criminal prosecution. Fraudulent claims will always require immediate repayment of the equity loan.

Crashy_Time

Gwendo40 wrote: »

Remarkable how the financially illiterate still think that BTL is the path to easy, untold riches.

Yes, the boat has most likely sailed on BTL TBH, it is now firmly established as a potential tax target by the PTB.