Mortgage end of next year or am I being too ambitious?

bolwin1

sim2335 said:

I like option 2.
however what if I choose option 1 but rent it out then moved out in 2 years?
at least the I will be on property ladder, and everything will be paid for by tenants until I move in

You will need at least 25% deposit for a Buy To Let Mortgage, so will have to save for a couple more years for that option. I suspect a gifted deposit for a BTL won't be looked on very kindly by the lenders either. 

tim_london

Honestly no.  

Learn to play with 'amortisation calculators' on MSE and other websites and see for yourself what high interest does to your outlook.  For example at £500 p/m available for mortgage for a 90k mortgage (ignore how much deposit you have for now):

• 2% main bank mortgage - 18 years to pay it off - £496 a month - after 5 years you own £21.8k against the property, this is your money.  £8k is lost on interest.
• 6% subprime mortgage - 39 years to pay off (not even allowed by lender anyway) - £501 a month - after 5 years you own £3.5k towards your property.  £26.5k is lost on interest.

Ignoring the fact that you probably can't get buy-to-let mortgage, the stress of having no tenants or bad tenants, legal duty to fix issues, law has changed so all rent payment is taxable and your mortgage payment can't be claimed as tax expense.  Even if it all goes out to plan you'd just have £3.5k to your name.  Think about it, £500 * 12 months * 5 years is £30k - that's 90% of your hard earn money to interests, and you only get to keep 10%.  This is not what people meant by being on the property ladder!

Don't lose heart though.  Remember the issue here is actually not your financial position, but your credit history.  3 years is faster than it sounds.  Keep your records clean and use the time to actually save up money for a larger deposit for a bigger, better property.

[Deleted User]

sim2335 said:

I like option 2.
however what if I choose option 1 but rent it out then moved out in 2 years?
at least the I will be on property ladder, and everything will be paid for by tenants until I move in

I've read a few of your threads and I am curious as to what you do at the bank where you work.