drb5

iTrader: (4)

Anyone got a good deal lately?

Fantom

No such thing as a good deal with these. An utter con if you ask me. Why should you have to pay a higher rate than a normal mortgage even though the risk is lower.
If you have to put a substantial deposit down then why are they so worried. If you couldnt make the payments you just sell it.

LSherratt

iTrader: (1)

Im 21 and bought my first house last month (completation date 6th Jan when I get my keys) for the whole purpose of it being a buy-to-let (still living with my parents and my job requires me to stay on site).

Im a first time buyer, young age 21, earning just below average wage. Out of all the mortgage offers available in the UK on the database shown, it only brought up 1 mortgage offer which matched my criteria so I HAD to go with it.

4.39% fixed for 2 years which is actually not too bad (Natwest buy-to-let).

You have to have a 30-35% deposit down on the house and the rent which it brings in needs to cover the mortgage repayments by 120% (something like that off the top of my head) which my property happily does with ease.

edit: Fantom, the risk is usually higher for mortgage lenders, not lower.

drb5

iTrader: (4)

How long did it take to set it up LS?

I see the start up fee is 2k.

cookstar

iTrader: (6)

My most recent one that completed last Friday came with fees of around £700 from memory.

Pretty good deal, I can't remember exactly what it is off the top of my head, but it's decent.

If you want a number then PM.

cookstar

iTrader: (6)

Also time wise, he normally has a few for me to choose from within a few hours.

LSherratt

iTrader: (1)

Yep the mortgage fee is £2k which they add onto the mortgage so your monthly repayments are a tiny bit more (in my case I pay an extra £10 a month for this).

And not quite sure what your exact question is but from when I placed my offer on the house, it got accepted in about 1 week, and then I had a meeting with my mortgage advisor to look at mortgages (as already stated earlier, out of all the mortgages available, there was only 1 that I could have due to my circumstances) so I pretty much had to accept it. All my paper work, etc, got sent off to the mortgage lender (Natwest) via my advisor, they confirmed and did their checks on me and the property, etc, and confirmed the offer. This took about just over 1 month but it would have been quicker if Natwest got their **** in gear!

Expect to do a lot of chasing up on people otherwise things will never happen. I was making phone calls every couple of days just to see how things were going (solicitors, estate agents, mortgage advisor, etc) as there is a lot of communication between them all.

drb5

iTrader: (4)

Cheers guys. We have a long story, but really need one sorted out by end of January to mid February.

Cookstar, number would be handy if you have it?

Fantom

How exactly is the risk higher?
The fact that you don't live there means they don't need to repossess you if you can't pay. You just sell it

andy97

iTrader: (1)

I would like to know what rental returns in % you guys are achieving? I have properties and looking at buy to let mortgages over 15 and 20 years give no income off the rent. Obviously you have a property paid for at the end of mortgage. 15 years is a long time though.

Ill stick to buying properties the old fashioned way

Dingdongler

What is the old fashioned way? In exchange for goats and sheep? Or sexual favours to the local squire?

WRXBOB

We're lucky in that less than 2 weeks rental income covers the mortgage and insurances on each of our properties.
IIRC our buy2let mortgages cost just under £2 pcm per thousand borrowed.

andy97

iTrader: (1)

Hard cash old boy

nik52wrx

Current ecomonic climate, i don't think so.

LSherratt

iTrader: (1)

Generally speaking they are classed as higher risk due to the fact you're relying on the tenants to pay rent each month to cover the cost of the mortgage and insurance. There may be a period where the house is empty and the mortgage still needs to be paid.

Yes I understand your point about why is this "higher risk" but this is the reason. However, when the lenders do the checks on you such as your income, how much rent you expect to achieve, etc, if you can easily afford this then there is no reason why the interest should be higher to be honest.

In my case for example, if I had the house left empty for a month or two, I could afford to keep paying the mortgage so why shouldn't the interest be the same as a bog standard residental mortgage? Afterall, everyone is out to make money and this is how BtL lenders make theirs by almost forcing you to believe that they are simply higher risk so charge more interest.

You need to find a property that brings in rent which is enough to pay for the mortgage, letting agency fees (usually 10% out of your rent), insurance, and still a bit left over each month for yourself to keep and any repairs which may need to be done. When all these factors are taken into account Im only left with £80 at the end of each month which I am happy with as the whole purpose of a BtL property is a longterm investement anyway so this extra is basically pocket money on the side which I can save/make any repairs if needed. (and ofcourse will have the property paid for at the end of my mortgage).

My gross yield is 6.7%

Dingdongler

Then you are a fool son. It's not tax efficient and you are not benefiting from the gearing that is so important in amplifying your capital gain.

Fine to buy your primary residence in cash but makes no sense for investment property (unless you are cash rich in the way a sovereign wealth fund is)