| Buying first house - Buy to Let 18:46 - Jan 15 with 3140 views | tractorboy7777 |
A question for those in finance.
I am looking at houses currently and the cheaper houses where I live are only just in my budget (what I’m saving by living with parents). What I mean is I could only afford the mortgage payments before heat, light, food etc.!
I am really keen to get on the market before an increase that takes it out of my bracket again!
The only other way I can see would be to get a buy to let but you need a very large deposit.
I am curious as to whether there are mortgage lenders that would allow you to initially rent out a home that you intend to eventually live in, without calling it a buy to let? [Post edited 15 Jan 2018 18:46]
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| Buying first house - Buy to Let on 19:05 - Jan 15 with 3086 views | clive_baker |
Unlikely, as you say they would insist on a large (minimum 30% deposit). Of course that doesn’t stop you doing it anyway (personally I would do it). Have you considered living in it and renting out the spare bedroom(s) if it has any? A mate of mine does this on his 3 bed flat in London and the rent from those 2 rooms pretty much covers his mortgage. [Post edited 15 Jan 2018 19:06]
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| Buying first house - Buy to Let on 19:14 - Jan 15 with 3049 views | tractorboy7777 |
| Buying first house - Buy to Let on 19:05 - Jan 15 by clive_baker |
Unlikely, as you say they would insist on a large (minimum 30% deposit). Of course that doesn’t stop you doing it anyway (personally I would do it). Have you considered living in it and renting out the spare bedroom(s) if it has any? A mate of mine does this on his 3 bed flat in London and the rent from those 2 rooms pretty much covers his mortgage. [Post edited 15 Jan 2018 19:06]
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The couple I’ve looked at have been one beds so that’d throw that out of the window. But it’s definitely something to think about! | |
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| Buying first house - Buy to Let on 19:15 - Jan 15 with 3042 views | giant_stow |
Depending where you are prices might be dipping now, so why rush? |  |
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| Buying first house - Buy to Let on 19:17 - Jan 15 with 3037 views | sparks |
| Buying first house - Buy to Let on 19:05 - Jan 15 by clive_baker |
Unlikely, as you say they would insist on a large (minimum 30% deposit). Of course that doesn’t stop you doing it anyway (personally I would do it). Have you considered living in it and renting out the spare bedroom(s) if it has any? A mate of mine does this on his 3 bed flat in London and the rent from those 2 rooms pretty much covers his mortgage. [Post edited 15 Jan 2018 19:06]
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Lodger sounds feasible.
But no. You really can't buy to let without significant deposit and if you did it whilst not telling them you would be in beach of the mortgage and potentially repossessed as well as committing fraud. |  |
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| Buying first house - Buy to Let on 19:22 - Jan 15 with 3016 views | BloomBlue |
Squatting is easier and cheaper, certainly no mortgage payments. That's how I started on the property ladder, first property was a small flat and within months I was living in a 10 bedroom house |  | | |
| Buying first house - Buy to Let on 19:33 - Jan 15 with 2988 views | north_stand77 |
Have you considered the government's part rent/part buy scheme? A smaller deposit is needed and I think you own about 50% and pay rent on the other part (usually smaller than a full mortgage repayment)
If property prices go up, so will your equity which may give you enough, in time, to move to another property. |  | | |
| Buying first house - Buy to Let on 20:03 - Jan 15 with 2928 views | clive_baker |
| Buying first house - Buy to Let on 19:17 - Jan 15 by sparks |
Lodger sounds feasible.
But no. You really can't buy to let without significant deposit and if you did it whilst not telling them you would be in beach of the mortgage and potentially repossessed as well as committing fraud. |
Just noticed the terrible timed autocorrect on that post. Meant I wouldn’t do it! Repercussions could be heavy. | |
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| Buying first house - Buy to Let on 21:52 - Jan 15 with 2811 views | connorscontract |
Some thoughts:
1. Look into the Government's Help to Buy Scheme for First Time buyers. It might be possible for you to get a 3 bed, say, with this and then rent two rooms to lodgers.
2. Would your parents be willing (and are they able) to go 50/50 on the deposit with you? Then you could each receive half of rental income from lodgers and each pay 50% of the mortgage (trchnically they could also charge you half rent for your room). You and they each then own 50% of the house, but crucially, you are on the ladder and accumulating capital as the years go by.
3. Have you looked at the difference between Interest Only and Repayment Mortgages in terms of monthly payments? That could make a 3 bed more "affordable" in terms of monthly payments, and you could use the excess from re ting to lodgers to build up an ISA to eventually repay, but would have more space in your budget should you have a month or two without a lodger.
These are my thoughts, not financial advice. As others have said any attempt at gaming the system could land you in serious hot water with the bank, and even lead to a fraud conviction. Spending a relatively small amount on financial or legal advice might be a very worthwhile investment. | | | |
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| Buying first house - Buy to Let on 23:08 - Jan 15 with 2735 views | amy73 |
I would not advise buying a house unless you:
a) can afford it
b) want to live in it
There is no point otherwise. The concept of the ‘property ladder’ is dead. There is no real money in buy to let. You are better of waiting until you can afford something you want, otherwise what is the point? | | | |
| Buying first house - Buy to Let on 23:13 - Jan 15 with 2727 views | Clapham_Junction |
| Buying first house - Buy to Let on 19:05 - Jan 15 by clive_baker |
Unlikely, as you say they would insist on a large (minimum 30% deposit). Of course that doesn’t stop you doing it anyway (personally I would do it). Have you considered living in it and renting out the spare bedroom(s) if it has any? A mate of mine does this on his 3 bed flat in London and the rent from those 2 rooms pretty much covers his mortgage. [Post edited 15 Jan 2018 19:06]
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Unfortunately (at least in my experience), banks won't take into account any income from letting out rooms in the property when they consider mortgage applications. When my ex-partner and I got a mortgage on a flat about four years ago, the only income they would consider was our salaries.
I've no idea why as the potential rental income from one room was nearly half my take-home pay. [Post edited 15 Jan 2018 23:15]
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| Buying first house - Buy to Let on 06:42 - Jan 16 with 2621 views | bluelou |
If you don't already own a house then you have more options here than others looking at at BTL.
You could get a normal mortgage, love in the house for 6 months or so while you do it up then move out and let it out.
If you do this you could tell your lender and pay a little more % each month or you could choose to not tell them and carry on with your current payments. Make sure you declare the income though and pay tax on any profits (def get an accountant to do this for you).
Either way the rental market is still quite strong and despite the recent raise the interest rates are lower now than they will be for the next 10 years so get a nice first time buyer fix mortgage and get on the ladder. It's a good source of monthly income and hopefully investment on an asset that will increase in value to the tube of abou 5% a year (could be more depending where you live) | |
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| Buying first house - Buy to Let on 08:43 - Jan 16 with 2538 views | hype313 |
When I first bought my house I did it with the intention of having a lodger for the first few years, this helped hugely, and whilst you sacrifice a little space, you make up for it with the fact that you get on the ladder and not making it a huge financial hit.
After a few years, I was able to earn more and therefore manage the bills without the need for a lodger, I would recommend this to anyone starting out on the ladder. |  |
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| Buying first house - Buy to Let on 09:08 - Jan 16 with 2512 views | Kitman |
| Buying first house - Buy to Let on 21:52 - Jan 15 by connorscontract |
Some thoughts:
1. Look into the Government's Help to Buy Scheme for First Time buyers. It might be possible for you to get a 3 bed, say, with this and then rent two rooms to lodgers.
2. Would your parents be willing (and are they able) to go 50/50 on the deposit with you? Then you could each receive half of rental income from lodgers and each pay 50% of the mortgage (trchnically they could also charge you half rent for your room). You and they each then own 50% of the house, but crucially, you are on the ladder and accumulating capital as the years go by.
3. Have you looked at the difference between Interest Only and Repayment Mortgages in terms of monthly payments? That could make a 3 bed more "affordable" in terms of monthly payments, and you could use the excess from re ting to lodgers to build up an ISA to eventually repay, but would have more space in your budget should you have a month or two without a lodger.
These are my thoughts, not financial advice. As others have said any attempt at gaming the system could land you in serious hot water with the bank, and even lead to a fraud conviction. Spending a relatively small amount on financial or legal advice might be a very worthwhile investment. |
err, there's a few things quite wide of the mark here on points 1, 2 and 3. The last part is correct. Go and see a qualified Mortgage/Financial Adviser who will explain the current lending market and what you can and cannot do. Most don't charge for initial advice and avoid the ones that do.. |  |
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