BTL advice

longwalks1

Hi

Having been a watcher of the forum for a few months I thought it time to join and start learning. I will soon have approx £20k to invest and am currently considering my first Buy To Let. I know I should of done this 12 years ago but I was only 14 then!
I’m looking at properties near Huntingdon (50mins on train to kings cross), 2 bed flats roughly £100k that would let for £600 pcm. Not finalised figures but these are estimates. I am not looking to make a profit each month, but looking for long term capital growth. With the above figures would I get a BTL mortgage, repayment or would I only be offered an interest only one?

If I was to take out an interest only one, at what point (or how) would I be able to re-mortgage to begin paying off the actual loan value too?
Hope this made sense
Any help/comments/advice will be greatly appreciated!
bboy

eurows

In all honesty it makes no sense at all. You missed the boat and now you are being seriously foolish with your money.

First of all what makes you think you will get £600.00 for the flat. Can you afford to service the loan if you don't.

Secondly, the last thing you want to do is get an IO mortgage. If you cannot afford a repayment mortgage you cannot afford to risk your money.

Doozergirl

For once, I think I agree.

You must do your maths as I suspect you will see very little back, if anything from an £80,000 BTL repayment mortgage once you've factored in the costs of renting a property out and the service charges on the property. It's all very well not wanting to make a running profit, but with house prices where they are, the long term gain will be minimised by any short term correction. You also need a buffer whilst interest rates are low to protect you from losing money is they rise.

IO is pointless if this is long term, unless you want a flexible mortgage to use your profit to overpay your mortgage (not a bad idea as you canuse funds to maintain the property, if neccessary)

Check your area too, you are looking for highest yield, not just nicest flat. £100k sounds blinking cheap for a 2 bed in that area though!

sooz

don't know the area, but if you want long term you do not want interest only.

so with repayment, would you be out of pocket after you have covered all costs, incl service charges. can you manage the property, or will you have to use an agent.

would it be poss to increase your deposit, so monthly mortgage payments would be less.

also, please do not forget new hmo regs, your flat [if a conversion within a house] may come under this, and incur further charges...