Buy To Let Mortgages

Discussion in 'Finance, Property, Law' started by southern sapper, Apr 7, 2012.

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  1. I've used the search function but to no avail (although I know if I've been a mong, search results will come flooding in!).
    Also browsed the internet but it doesn't necessarily comprise of purely factual information(!) so asking for some help from the Arrse population if possible.

    I am looking to buy my first property and have been told by a friend that in order to rent it out I will have to get a buy-to -let mortgage. I searched online with some websites saying it it not necessary and others saying it is a must have. Anyone got a definitive answer?

    Also every buy-to-let mortgage I have seen is interest only and I (may once again be wrong) can't see any benefit for me in this type of mortgage, unless I maybe put any excess earned into a high interest savings account? Is this the only type of mortgage available for such a venture?

    Apologies if I am way off the mark, I know nothing(!) and so far have only briefly looked into this but am serious about getting onto the property ladder within the next 10 months. Also apologies if the above reads badly, I'm afraid I have severe woman flu and its hampering my ability to do anything bar eat chocolate
  2. I've rented out several properties and have never had a 'buy-to-let' mortgage. Looked into it years ago, when the property market was booming, but thought them far too expensive and was told (rightly or wrongly) that you didn't have to have one.

    One thing though, you should take out 'Landlord's Insurance' both to cover yourself and your investment if you go ahead.
  3. Yes thanks, I will. Along with a (hopefully) reliable agent to manage things for me as I can't afford to buy anywhere near where I am based. Don't fancy having to travel halfway across the country to sort out problem tenants
  4. Sapper,

    As long as you are still serving you don't need to have a buy to let mortgage. Let the mortgage company know from the off that you are buying it as you main residence and it is your intention to live in eventually. Once everything has gone through tell them that your posting will not allow you to live in it currently and you intend to let it. They will give you a permission to let letter. You will only need a bog standard mortgage and they are a lot cheaper than a buy to let usually at least 1 or 2%.

    I've done this twice with the Woolwich and the Halifax and had no problems. They seem'd keen to help squaddies get on the property ladder.

    The advice about Landlords insurance is worth following. The only problems I've faced is crap letting agents doing nothing for their 2-4%. Research your letting agents and play them off against each other to get the best deal.

    You will get some pain along the way but it'll be worth it in the end. Now's the time to buy.

    Good luck.
  5. I have had a couple of houses over the last few years and rented them out, I didn't have a buy to let mortgage and had no problems. As previously mentioned, you don't need one.
  6. Dependent on the mortgage company you may have to pay for the permission to let letter.

    I was with Alliance and Leicester and paid £195 for the letter.
  7. Agree with most points just get a normal mortgage and then let it as though circumstances have changed, the letting agent is the key check out minimum of 3 if not more and play against each other.

    LOOK AT THEIR FEES, e.g. renewaL of Tenancy agreement can vary from £40 - 125 for 6 months let period. Confirm the insurance is a must

    I have had 2 rented now 11 and 7 years wsithout a buy to let mortgage on either.
  8. And you'll have to do a tax return.

    Despite what anybody tells you otherwise don't dodge the tax man. You get in less shit for murder.
  9. Unless your Amazon or vodafone.
    • Like Like x 1
  10. As bluebell has already stated, get the tax return sorted. I pay an accountant £70 to do mine and I've had a rebate every year. Well worth it.
  11. Bluebell?!?!?
  12. dingerr between us he'll get it..............
  13. Ahhh, thought he was taking the Michael.
  14. Thanks for the help guys. I'm very happy about not needing a buy-to-let mortgage and reckon that even paying for the letter will be better than the alternative in my situation.
    Wait out for me on here in a few years time asking about early repayments! Sorry but having got decent advice on here I doubt I'll go back to pointlessly searching the internet!