Buy to let advice

Crashy_Time

Tlc11 wrote: »

Ok firstly to clarify, I came on to ask for some assistance in BTL mortgages, I'm not asking if you think I should or not. But to answer your questions...

80k or there abouts gets you a nice 3 bed house in the area I am looking at that I know very well, in Scotland. Where I live now I wouldn't even get a studio flat for that. People there tend to rent long term. I know this as I have friends and family who stay there. So I am not worried about that in the slightest. Bottom of the market there is 30-40k.

AdrianC - yes, I do have all of this information, and I won't be showing it to a stranger on a public forum. My question was specifically to do with obtaining a BTL mortgage. I feel you may have misunderstood my question.

Gwendo - I haven't banked on it. I remortgage my home to release equity and the bank valued it at 485k after the works. (Actually, a local estate agent valued at 500k and I know banks tend to value cautiously) I will ignore your comment in relation to 'the most determined and deluded', it's irrelavent and rude.

Pramsay - overpaying was my other thought process, I will consider this too, thank you.


If anyone has any information specifically on a BTL mortgage and if I should pay off my CC's before obtaining one I would be grateful. I am not here to ask anyone's permission!

Is this Inverness area?

Tlc11

No, not Inverness...

Crashy_Time

Aberdeen?:rotfl:

Tlc11

Nope. A little more south...😁

Comms69

Tlc11 wrote: »

Hello all, hoping to get some advice from you knowledgeable lot please!

So we own our home, have about 25% equity in it now (we had more but took some out to do kitchen renovation and an extension). Can manage our mortgage payment comfortably. Our home is worth around 485k. - so totally irrelevant

We have about 20k spread among 0% credit cards from the renovation which again we are paying off with no issues. - so totally irrelevant

I have some savings that I would like to put down as a 25% deposit on a BTL. I would like to take a repayment mortgage and the rent I could charge covers the mortgage plus about 50% surplus to put aside for any repairs etc or to overpay on the mortgage. - and tax?...

Ideally I will then save again and buy another BTL until I have a few of them. - irrelevant I am looking at a purchase price of around 80k per BTL. My long term plan is that we will then have a few properties paid off, we can live off the rent and our pensions in retirement and my children can inherit the properties. - Except inheritance tax, income tax, capital gains tax, stamp duty tax....

So my question is - given the info above, would I be able to get a BTL mortgage, given that I have debt? Would I be better paying off the debt ( I pay 0% for the debt but get interest on my savings) - ask a broker. in effect you have £0 at the minute

Any advice appreciated, or feel free to correct me if I am completely off on what I have said! Thank you

What are the avg rents for the area £400 a month?


Your profits are going to be so small on this.

Bluenose123

Would be I interested to know what part of Scotland you are looking at as currently looking for a good buy to let for under 100k.

SmashedAvacado

I would say that the fact you have a large credit card debt and not much equity in your property is relevant not irrelevant.

I woudl focus on paying off your credit cards despite the fact they are on 0% because the lenders will take this into account, and also they make you very vulnerable when it comes to unemployment / any issue you have.

kingstreet

Tlc11 wrote: »

So my question is - given the info above, would I be able to get a BTL mortgage, given that I have debt? Would I be better paying off the debt ( I pay 0% for the debt but get interest on my savings)

It's practically impossible to say.

Under the recent PRA rules lenders have to assess the landlord's overall position when it comes to BTL financing.

The days of "as long as the rent is 125% of the interest it's alright" are long over.

Typically, you will now have to have rent equal to, or more than 145% of mortgage interest assuming 5.5% pa and this is affected by the type of mortgage (2Y fix v 5Y fix) and your marginal tax rate.

In the next few years, the ability to claim relief against mortgage interest is being reduced so more of your rental income is going to become taxable.

Get independent taxation and mortgage advice before you do anything else...