Second charge mortgage

Russ39326

I am looking to do a buy to let. I was looking at various calculators and researching. A loan company said they could likely advance me the money for a deposit against my house.
I said that's insanity as I only have about 40k of equity and the sales guy said oh we can go up to 100%. 
My response was that my bank would have something to say about that, as the mortgage was based on putting down a 15% deposit. 
Any thoughts? My gut feeling is I'm right but the guy seemed very confident

csgohan4

You usually need a 25% deposit as well the standard affordability criteria.

Using a loan to get a BTL will also affect affordability. Putting a charge on your main house sounds a like a bad idea and I would seriously look at the T+c

Have you considered having a BTL is also quite costly in maintenance, non paying tenants, compliance e.t.c

MaryNB

csgohan4 said:

You usually need a 25% deposit as well the standard affordability criteria.

Using a loan to get a BTL will also affect affordability. Putting a charge on your main house sounds a like a bad idea and I would seriously look at the T+c

Have you considered having a BTL is also quite costly in maintenance, non paying tenants, compliance e.t.c

This! If you don't even have the cash for a deposit, how will you be able to pay two mortgages if the tenants stop paying rent? What happens if the EICR comes back with loads of urgent issues and you need to pay for a significant amount of electrical work to be done before you can rent it out? What happens when the gov or local council brings in new legislation that requires significant upgrades in the near future (which they seem to do on a fairly regular basis)? 
You need funds to set up a lettings business. 

user1977

Russ39326 said:

A loan company said they could likely advance me the money for a deposit against my house.
I said that's insanity as I only have about 40k of equity and the sales guy said oh we can go up to 100%. 

But presumably at rates which reflect the high risk of them not getting all (or any) of their money back in a repossession?

dimbo61

Don't forget the EPC which must be E or better.
Government is talking about C rated EPC for rental properties from 2025

Your residential mortgage lender would also have to agree to this