[Finance] Buy to Let Mortgages

[Renegade1]

Generally

basic rate tax payers loan x 5.50% x 125%
higher rate tax payers loan x 5.50% x 145%

Lenders who lend based on overall personal income, rent and commitments, Barclays, Clydesdale Bank and the Furness Building Society, 25% deposit needed

Can you give an example on say for example someone earning 30K?

Can bonuses on wages be considered when borrowing?

 

[Da Man Clay]

Can you give an example on say for example someone earning 30K?

Can bonuses on wages be considered when borrowing?

Have you considered it might be actually time to get some proper, personalised advice?

 

[Uncle Spielberg]

Can you give an example on say for example someone earning 30K?

Can bonuses on wages be considered when borrowing?

again it is based on rental income what they will lend

 

[Renegade1]

Have you considered it might be actually time to get some proper, personalised advice?

I have from someone on here.

Does your question apply to anyone else on here asking questions? Is it a problem to have a thread where members are posting
their questions,advice,opinions etc? Isn't that how forums survive?

Is anyone on here being forced to answer me or anyone else?

Do you normally come in late into a thread and troll?

Can you now please run along and troll somewhere else.

 

[Uncle Spielberg]

I don't think I can add anymore to this subject as it has been said so will leave now. Pm me if anyone needs any personal advice

 

[Shropshire Seagull]

I am with Nationwide who don't lend for BTL so would have to change.

Dig deeper my friend - The Mortgage Works do BTL mortgages and guess what, they're owned by ...... Nationwide.

Basically, Nationwide BTL products all come under a separate business line / division called The Mortgage Works.

Stop thinking all mortgages are equal - a BTL mortgage is a business loan and should not be confused with your personal home / residence and any loan upon it.

 

[Shropshire Seagull]

Very interesting.

So basically so long as you have a deposit of at least 25% and the rent will cover the interest only mortgage you can pretty much borrow for as many properties as you want?

If you for example had 100K, would you use that for a deposit for one property or go for 2 or even 3?

Is there any relevance to the capital you have in your own home?does it help?

You've missed the earlier post from Uncle that explains.

In very simple terms a BTL affordability check is based on the rentable value of the property [as assessed by the surveyor] and your mortgage repayments.

So, if the rent is based on £1,000 pcm your mortgage payment must be less than 125% of this [for a normal rate tax payer] aka £1,250.
With £100k to invest, you need to write yourself a little spreadsheet that crunches the numbers for you to see if your expected rental covers 125% of you mortgage payment.
Obviously, the purchase price, less the deposit equals your borrowing mortgage requirement. Now do the sums ....
This loan will not be secured on any other asset like equity in your primary residence - it is a standalone mortgage on a single BTL property.
Likewise, it's not directly means tested to your income, it's all about the 125% [or 145% for some].

So armed with that info, you can now decide for yourself how you might be able to use your £100k as deposit(s) in the BTL business.

 

[Triggaaar]

This is for me.I will be buying a property.Intended on 1 then considered 2 smaller ones.
Looking at Right Move you would get more for 2 smaller units however depends how much

And the two smaller ones cost half what the more expensive one costs?

Will also look into an equity release loan should I want to buy another.
Basically that's just a re-mortgage?

No, but either works. An equity release loan mean keeping your current mortgage and having another on top. I can't remember what excuses I've used for getting them in the past, but they would have included lies like 'property renovation', 'loft conversion' or similar

I am with Nationwide who don't lend for BTL so would have to change.

Change? You mean your current home has a Nationwide mortgage - that doesn't need to change. Just come up with a plausible excuse for wanting an equity release loan. Maybe you borrowed money from family to buy the property, and want to pay them back

Please note that comments I make may not be ethical, but since I don't answer to the financial ombudsman, they don't have to be
Any risks you take are yours, not mine, etc etc.

 

[Triggaaar]

I have from someone on here.

Does your question apply to anyone else on here asking questions? Is it a problem to have a thread where members are posting
their questions,advice,opinions etc? Isn't that how forums survive?

Is anyone on here being forced to answer me or anyone else?

Do you normally come in late into a thread and troll?

He's not trolling, he's (I think) simply saying you could pop into any estate agent that has a mortgage advisor and go through all this with them.

Can you now please run along and troll somewhere else.

Oh I say.

 

[Da Man Clay]

He's not trolling, he's (I think) simply saying you could pop into any estate agent that has a mortgage advisor and go through all this with them.

Oh I say.

He's not trolling, he's (I think) simply saying you could pop into any estate agent that has a mortgage advisor and go through all this with them.

Oh I say.

Exactly both of those things. It’s a 30 page thread nigh on containing some quite excellent advice. Realistically for me when you start asking for personalised projections it’s gone a bit beyond what this type of thread is for.

I’m not exactly one for trolling.

 

[Biscuit]

Can you now please run along and troll somewhere else.

 

[SK1NT]

I would like to see buy to let end as a concept, Cap rental rates in line with Council rents, Limit banks to lending for mortgages to 2.5 and 1 times the wage for a couple, allow encourage local Councils to borrow to build for rent, simplify the planning process with a time limit, Central Government to plan build a couple of new garden cities roads and infrastructure

Limit lending to 2.5 times salary.... are you mad. It is near on impossible to get a mortgage even at 3-5 times salary. The average salary is 24-26k a year. The average price of a property in the UK (not the south east) as of 2017 is £227k (http://landregistry.data.gov.uk/app/ukhpi) That is already at 10 times average income on the average UK price. This will be more than 10 times yearly salary based on average prices in the south east. We are seeing people pay ridiculous rents on properties that would likely have smaller mortgages but these renters are just not able to get on the ladder due to lack of deposits and tight salary to load ratios. I know frivolous lending was part of the property crash in 2008 however i would base this more on monthly, consistent earning potential and not on the yearly salary ratio to property value. I would also allow mortgages that require very small deposits (1%). Some mortgage lenders won't let you have a mortgage if the repayments are more than 25% of your monthly salary. This is not feasible nowadays. I would allow 50% of a monthly salary to go on a mortgage payment.Just to get on the ladder i am pretty sure 75% if not more of my monthly salary was going on mortgage payments.

As someone mentioned above the Tories are after accidental landlords and people struggling with one rental property. They need to go after the businesses and people who own 100's of properties. I don't begrudge people having one BTL, especially if a little holiday home or for pension.

Obviously they need to build more homes. Councils should be allowed to build or even buy up properties for social housing. Currently local councils aren't allowed to make money off property.

Simple…. I would say that no person or business is allowed more than say 3 properties… This would instantly solve the issue however they won’t do this as this will affect the super-rich who have a lot of power over the government, it will also affect people like the queen.

 

[Del Boy]

Whilst on the subject of leases and freeholds can anyone recommend a surveyor in Brighton to value a freehold price? I’ve been quoted 900 which seems a bit steep.

That is very steep. Call David Aspey @ Sussex Surveyors on 01273 821969, I have used him and highly recommend him.

 

[DJ NOBO]

Limit lending to 2.5 times salary.... are you mad. It is near on impossible to get a mortgage even at 3-5 times salary. The average salary is 24-26k a year. The average price of a property in the UK (not the south east) as of 2017 is £227k (http://landregistry.data.gov.uk/app/ukhpi) That is already at 10 times average income on the average UK price. This will be more than 10 times yearly salary based on average prices in the south east. We are seeing people pay ridiculous rents on properties that would likely have smaller mortgages but these renters are just not able to get on the ladder due to lack of deposits and tight salary to load ratios. I know frivolous lending was part of the property crash in 2008 however i would base this more on monthly, consistent earning potential and not on the yearly salary ratio to property value. I would also allow mortgages that require very small deposits (1%). Some mortgage lenders won't let you have a mortgage if the repayments are more than 25% of your monthly salary. This is not feasible nowadays. I would allow 50% of a monthly salary to go on a mortgage payment.Just to get on the ladder i am pretty sure 75% if not more of my monthly salary was going on mortgage payments.

As someone mentioned above the Tories are after accidental landlords and people struggling with one rental property. They need to go after the businesses and people who own 100's of properties. I don't begrudge people having one BTL, especially if a little holiday home or for pension.

Obviously they need to build more homes. Councils should be allowed to build or even buy up properties for social housing. Currently local councils aren't allowed to make money off property.

Simple…. I would say that no person or business is allowed more than say 3 properties… This would instantly solve the issue however they won’t do this as this will affect the super-rich who have a lot of power over the government, it will also affect people like the queen.

People like the queen ? Who is like the queen ?

 

[Renegade1]

Limit lending to 2.5 times salary.... are you mad. It is near on impossible to get a mortgage even at 3-5 times salary. The average salary is 24-26k a year. The average price of a property in the UK (not the south east) as of 2017 is £227k (http://landregistry.data.gov.uk/app/ukhpi) That is already at 10 times average income on the average UK price. This will be more than 10 times yearly salary based on average prices in the south east. We are seeing people pay ridiculous rents on properties that would likely have smaller mortgages but these renters are just not able to get on the ladder due to lack of deposits and tight salary to load ratios. I know frivolous lending was part of the property crash in 2008 however i would base this more on monthly, consistent earning potential and not on the yearly salary ratio to property value. I would also allow mortgages that require very small deposits (1%). Some mortgage lenders won't let you have a mortgage if the repayments are more than 25% of your monthly salary. This is not feasible nowadays. I would allow 50% of a monthly salary to go on a mortgage payment.Just to get on the ladder i am pretty sure 75% if not more of my monthly salary was going on mortgage payments.

As someone mentioned above the Tories are after accidental landlords and people struggling with one rental property. They need to go after the businesses and people who own 100's of properties. I don't begrudge people having one BTL, especially if a little holiday home or for pension.

Obviously they need to build more homes. Councils should be allowed to build or even buy up properties for social housing. Currently local councils aren't allowed to make money off property.

Simple…. I would say that no person or business is allowed more than say 3 properties… This would instantly solve the issue however they won’t do this as this will affect the super-rich who have a lot of power over the government, it will also affect people like the queen.

Also 40/45 year mortgages?

 

[Weststander]

Millions of new homes are required, both private and affordables through social landlords. Rent controls, credit controls, etc won't solve the underlying issues. There are huge numbers living with their parents or in friends homes in the 20's and 30's, or in B&B's on housing support, desparate to have a true home of their own. Nimby councils and residents have brought the entire system almost to a halt. From land becoming available to people moving in, which so many planning hurdles and legal issues, takes many years.

 

[Renegade1]

Exactly both of those things. It’s a 30 page thread nigh on containing some quite excellent advice. Realistically for me when you start asking for personalised projections it’s gone a bit beyond what this type of thread is for.

I’m not exactly one for trolling.

If this thread offends you then bog off.

 

[Renegade1]

And the two smaller ones cost half what the more expensive one costs?

No, but either works. An equity release loan mean keeping your current mortgage and having another on top. I can't remember what excuses I've used for getting them in the past, but they would have included lies like 'property renovation', 'loft conversion' or similar

Change? You mean your current home has a Nationwide mortgage - that doesn't need to change. Just come up with a plausible excuse for wanting an equity release loan. Maybe you borrowed money from family to buy the property, and want to pay them back

Please note that comments I make may not be ethical, but since I don't answer to the financial ombudsman, they don't have to be
Any risks you take are yours, not mine, etc etc.

The two smaller ones cost what the expensive one cost's.

I could take out a Further Advance mortgage with the NW and say it's for an extension but use it to buy a flat then risk getting
caught for mortgage fraud.I think I'll play it safe.

Well done for getting away with it.

 

[Triggaaar]

I could take out a Further Advance mortgage with the NW and say it's for an extension but use it to buy a flat then risk getting
caught for mortgage fraud.I think I'll play it safe.

Pathetic

As long as you pay the bill every month, they couldn't care less.

Is mortgage fraud a thing? In that case I'd like to point out that my dog has been using my PC for the last couple of days, I hope she hasn't said anything silly.



Yes, yes, you all thought my dog had been posting using my account for years etc.

 

[Renegade1]

Pathetic

As long as you pay the bill every month, they couldn't care less.

Is mortgage fraud a thing? In that case I'd like to point out that my dog has been using my PC for the last couple of days, I hope she hasn't said anything silly.



Yes, yes, you all thought my dog had been posting using my account for years etc.

Actually no, not pathetic.

It was explained to me by someone at NW that if I did that I would be committing mortgage fraud.

Should I ignore what I was told, do as you say and take a chance? Me thinks not.