Could we get a mortage?

Carer

I've just come into £100,000.
Partner and I are both 52 and currently renting. For various reasons we want to stay in this house for the next 10 years at least.

Looking at the possibilities of buying a buy to let house at around £220,000 and renting it out (possibly to a family member) at current market rate. Rental cost would be around £675 month.

We have no other property and have never owned a home. Both full time self employed with income of around £3k a month, of which we have at least £1000 left over at the end of each month.

However, I've had cancer (currently cancer free) and partner has various medical issues but none of which stop him working.

Can anyone tell me if this a total non- starter at our age or is it worth consulting a broker?

haras_nosirrah

Hi.

It may be possible but affordability will be based on income affordability as you are first time buyers rather than just first time landlords.

This is in broker who knows what they are doing territory as it is a specialised case. I know of a few lenders who would consider subject to the finer details being ok.

enthusiasticsaver

A few things come to mind.

As you are older there is a maximum age most lenders will go up to. Assuming you put the whole £100k into the house you are looking at a mortgage for £120k. Most lenders will not go past 70 so the maximum term may be 18 years. There are a few exceptions but they will want to know you have a plan to repay if you retire or cannot work.

If you are doing BTL normally the stamp duty costs more, you will need to have a BTL mortgage and the rate is normally higher. However if you don't own a property currently a FTB mortgage may be possible but I am not sure of the legalities of this as normally you have to sign a declaration saying that you and you alone will be living in it. You may be best with a broker.

Supposing your family member/tenant cannot pay the rent? You would be stuck paying the mortgage on a property you do not live in as well as the rent on your current home.

Normally you would get some sort of life cover to cover the mortgage so this could also be problematic if you both have health issues.

Personally if I were self employed and had health issues and a £100k windfall the last thing I would do is BTL. You do know you are liable to pay tax on any rent you receive don't you?