Tell me about Buy To Let.
Discussion
Slightly different one to the normal investment B2L.
We have a small outstanding mortgage on our current house of C£120K on a £350-400K property (just having it valued now)
We have seen a stunning property in the next village which we would love to buy, on at C£450K, but because our mortgage is low-ish in this one and the rental market is so strong at the moment we would like to try to rent this one out and buy the new one.
The other fly in ointment is I have my own business that is only a year old, although profitable and growing.
How would we go about this?
How easy would it to be?
How tight are lenders?
What sort of costs, monthly figures are we talking about?
Happy to pick up PM's later in this project, early days at the moment, only viewed it this morning!
V.
We have a small outstanding mortgage on our current house of C£120K on a £350-400K property (just having it valued now)
We have seen a stunning property in the next village which we would love to buy, on at C£450K, but because our mortgage is low-ish in this one and the rental market is so strong at the moment we would like to try to rent this one out and buy the new one.
The other fly in ointment is I have my own business that is only a year old, although profitable and growing.
How would we go about this?
How easy would it to be?
How tight are lenders?
What sort of costs, monthly figures are we talking about?
Happy to pick up PM's later in this project, early days at the moment, only viewed it this morning!
V.
To generalise somewhat (As lenders all vary) - I found that:
If the rent is more than 110% to 120% of the monthly mortgage payments on the BTL, when applying for your main mortgage the BTL will be classed as "self financing" and so wont affect affordability on your main mortgage. ie, it wont be classed as a liability to drag down how much you can borrow.
I found 60% LTV offered the best rates on BTL mortgages, I released equity to purchase my main home and this seemed the sweet point. (ie, 50% LTV didn't offer much better rates, whereas 65%+ the rates got significantly worse)
- I'd suggest:
Port your mortgage to the new place (increase the borrowing if needed) so keeping your current lender. You may find them more understanding to your job situation than a new lender.
Then, apply for a BTL on the existing property and release enough equity for a required deposit, stamp duty etc on the new place.
It's not that difficult to be honest; I'd see how much rent you'd get on the existing place first.
I've got a chap that can help with this; I've used him a couple of times and he's a good friend now. PM me if you'd like details.
If the rent is more than 110% to 120% of the monthly mortgage payments on the BTL, when applying for your main mortgage the BTL will be classed as "self financing" and so wont affect affordability on your main mortgage. ie, it wont be classed as a liability to drag down how much you can borrow.
I found 60% LTV offered the best rates on BTL mortgages, I released equity to purchase my main home and this seemed the sweet point. (ie, 50% LTV didn't offer much better rates, whereas 65%+ the rates got significantly worse)
- I'd suggest:
Port your mortgage to the new place (increase the borrowing if needed) so keeping your current lender. You may find them more understanding to your job situation than a new lender.
Then, apply for a BTL on the existing property and release enough equity for a required deposit, stamp duty etc on the new place.
It's not that difficult to be honest; I'd see how much rent you'd get on the existing place first.
I've got a chap that can help with this; I've used him a couple of times and he's a good friend now. PM me if you'd like details.
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