buy to let mortgages

buy to let mortgages

does anyone know much about these? i'm thinking about buying a house and renting it out but i dont know which is the best route. i have been told just to get a 2nd mortgage.

any help much appreciated. thanks

They are nowhere near as easy to come across as they used to be, you need a decent size deposit these days.

thats how it was when i was working for a property investor 2 year ago anyway.

a lot of them do want 25% deposit on BTL mortgage but i could get 2nd mortgage with around 10% deposit. I just not sure what the difference is between the mortgages themselves.

not much difference to be honest, the only difference I noticed when dealing with the investors applications was having to put the potential rental income from the property and the mortgage rate was different

You can only have ONE residential mortgage so i dont know what you mean about "just get a second one", plus the lender wil have to be aware of your plans to rent it out and wouldnt lend you it.

A mortgage is just a big loan dont worry too much about it, its just the same as a loan for 5k for a car except add a few 0's.

A B2L will ask for 25% deps where as resi mortgages can ask for 40%!

If you own your own home (which you do) and are in full time employement you are assured to get one. Barlcays ask for a job of 20k a year but Nat West dont. Id give Nat West a ring. You need to tell them what the rent is going to be and it has to cover what they see as value, so always fib a little on what rent u will get (at least 500 a month min).

A b2L will be a higher %%%% than a resi as its seen as higher risk by the lender.

Once u have the loan tho its plain sailing and your will only be tied in for 2/3 years then u can change it to a resi or another b2l.

Oh, some lenders have a minimum loan value as well, normally around 50k so your house that your looking at will have to be worth 50k AFTER u have paid 25 dep

Dont listen to the negative posse you really cant lose in property esp now. AS LONG AS YOUR CAN RENT IT OUT. If you have someone lined up your laughing. Plus Property will be worth 25% more in less than 5 years the way its looking

I dont even consider "what kind of mortgage" i am using, or even the rate. When i want a property I have to move fast and the prioity is GETTING IT ill bang out any rate and any mortgage as long as I get the house in my name.. thats the important thing, getting the kip.

You can faff on with rates and mortgage types at your lesuire after u have it, your tied in for two years anyway so plenty of time to do so and all along if its rented its costing u fuk all

My parents are selling there house and wanting to rent. I'm gonna look into buying a house with Dan and renting it to them. I'll have guaranteed rental for the next 20years or so, which would be the mortgage paid for.

i havent asked them yet but i'm hoping i would have someone who would rent it. My only real worry is making sure i'm not out of pocket so i suppose as long as i can raise the deposit and the rent covers the mortgage payments then hopefully i'm laughing.

i'll discuss more with the mr. tonight. thanks people

Its fair enough saying you need to make sure the rent payment covers the mortgage but there is other costs: repairs, insurance, council tax if it is unoccupied

if you have a decent deposit, do it, but I personally think it is a risk if you are only looking at a couple of years, if you are looking for long term investment then property will always be a sound investment!

it would be long term. i wouldn't even consider doing it as a short term thing as i personally dont see the point.

thanks again

UNless you have a massive deposit the rent probably wont cover the mortgage so you'll be paying a small amount each month. But it beats saving cos it's like someone else is saving for you. Through the years the rent can be put up but your mortgage payments will usually be around the same price.

no the rent will definatley cover the mortgage and some so we'd b sweet there

its very difficult to get more than one residential mortgage as you have to show bank statements which will generally show your mortgage payments already going out in most occasions although it can be done. where i work they let you have 2 residential mortgages as long as you have a 20% deposit in each property, although the questions would be asked why you would need 2 residential homes, some people have one as a 'holiday home' so it is possible, both of my mortgages are residential but i have consent to let and i run the risk that the mortgage lender will one day say that consent has run out and move it to buy to let at which point rates would go through the roof.

min deposit anywhere i think is 10% but to get a decent rate you need a minimum of 25% if not more on a residential rate that is.

renting a property is alright and can make decent cash but only if you have a really big deposit. ive got 50%) in my flat and make £450 per month off it (its on interest only at the moment i have found and it can become a bit of a ball ache at times when you get rung up from complete spaz's thinking lights are broke cos the bulbs gone etc etc wouldn't waste my money paying for an estate agent or management company to look after it unless i lived miles away from the property

If you have to put in 25% on say a £100,000 property, then you need to lend £75,000. Interest only mortgage payments at 6% would be £375 per month (i think)

Assuming you could let it at £500 per month, then after voids/repairs etc (assuming 15%), you might average £425 a month net income over a long period.

So you would make £50 a month on a £25,000 investment (thats £600 a year). Basically only a 2.4% return. You could make more putting that £25k in the bank.

Obviously if prices rise, then you do start to make some money.


These is just a fictional example - i dont know what interest rates you can get BTL mortgages at. But that is the process you need to go hrough before deciding to buy anything.


That said, if you do have cash for a deposit, now is a good time to buy.

Insurance is peanuts £20 a year on a 150k house, you only need buildings ins.

Repairs, What repairs? I repaint for about £200 every two years. Anything other than wear and tear the tenant pays.

Council Tax is 50% if unoccupied, so about £40 a month, no biggie

The only way you could possible fuck up is if you bought a 200k house thats max rental was 500£ a month. The mortgage alone would be 900 so your 400 down.

Guess what people do tho, THEY BUY HOUSES THAT COVER THE RENT :0 woooweeeeeeee fucking genuis's or what.

a 90k to 100k house will return 500k a month easy, simples.

As for people doing this has caused the fuck up, well i reply people thinking like this is the reason the people saying it are FUCKING SKINT.

Get it done pet.. Lifes too short to be sitting the cheap seats

I see what you're saying but you're forgetting a big point there. The house will be owned by you after the mortgage has finished. So you'll still have the 25k plus 75k what the house was worth, plus the house value will have risen in 25 years. Plus the small amount you've been making each month which would of increased every few years when you put the rent up.

So assuming all of this. £600 a year for 25 years = £15000.
add the £100k house value
and lets say 30k that the house might of risen in that time. (This could potentially be alot more)

That's £145k.

If you left the 25k in a bank at 6% interest rates then you end up with £107k after 25 years.

you need to know what you are doing or ou can end up badly burned. renting property is not the piece of cake it appears. get some professional advice. I got really screwed when I tried to rent a flat in North Shields a few years ago.check this out as an example of what can happen
http://www.landlord-forum.co.uk/forum/forum_posts.asp?TID=2979