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Can you buy a house when you don't have a job? watch

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    So for anyone that's bought a house or applied for a mortgage, hoping you can give some advice.

    I am thinking of buying a house for 200-225k, for buy to let purpose.

    I also currently have 120k in savings. I know banks typically peg mortgages to a multiple of your salary, but wondering if a bank will lend to me based on just rental income from letting the property out?

    Plus if there any periods when the property is unoccupied I can still make the mortgage payments from the 120k I have saved up, and that 120k is currently invested too, so it will be more than enough to last me over a decade of mortgage payments.


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    Wait, if you have £120k in savings but are going to keep that invested elsewhere, what deposit are you putting down? Do you own your own property already?

    My understanding is that some lenders might be able to provide you a loan on this basis, but you'd almost definitely be seen as at higher risk, so should expect to see higher interest rates than otherwise. You'll also need to be able to pay down to at least a 75% LTV.
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    (Original post by estel)
    Wait, if you have £120k in savings but are going to keep that invested elsewhere, what deposit are you putting down? Do you own your own property already?

    My understanding is that some lenders might be able to provide you a loan on this basis, but you'd almost definitely be seen as at higher risk, so should expect to see higher interest rates than otherwise. You'll also need to be able to pay down to at least a 75% LTV.
    Thanks for response.

    Am expecting deposit to be like 20-30k which I also have on top of the 120k.

    Paying down mortgage shouldnt be an issue as it will all or mostly be covered by rent. But are you saying that banks may require loan be repaid to 75% before you can sell the house?

    Also given expected house price growth, would probably be looking to sell the house within 3/4 years from purchase. I know banks have prepayment penalties on mortgages, but is there anything else they might require that would restrict you from selling house within 3/4 years?


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    (Original post by Esoteric-)
    Thanks for response.

    Am expecting deposit to be like 20-30k which I also have on top of the 120k.

    Paying down mortgage shouldnt be an issue as it will all or mostly be covered by rent. But are you saying that banks may require loan be repaid to 75% before you can sell the house?

    Also given expected house price growth, would probably be looking to sell the house within 3/4 years from purchase. I know banks have prepayment penalties on mortgages, but is there anything else they might require that would restrict you from selling house within 3/4 years?


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    You don't need a job to get a buy to let mortgage, but B2L mortgages tend to require a reasonably high level of loan to value. If you go down this venture, you need to factor in not having the property rented out and running repairs. You also need to consider the market at the moment. There was recently a clamour to obtain B2L properties ahead of the governments increase in stamp duty. As a result, we are likely to see a glut of properties to let over the coming months which could have a downward pressure on prices.

    To be honest I wouldn't bother. It is pretty hard work for the return. I know several people who have one or more properties rented out and all grumble about the amount of effort they have to put in and the amount it costs them in maintenance and repairs. If you want reasonably quick returns on your money, buy house and rent out the rooms. Much easier.

    Good luck!
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    (Original post by Esoteric-)
    Thanks for response.

    Am expecting deposit to be like 20-30k which I also have on top of the 120k.

    Paying down mortgage shouldnt be an issue as it will all or mostly be covered by rent. But are you saying that banks may require loan be repaid to 75% before you can sell the house?

    Also given expected house price growth, would probably be looking to sell the house within 3/4 years from purchase. I know banks have prepayment penalties on mortgages, but is there anything else they might require that would restrict you from selling house within 3/4 years?
    Most lenders seem to require a 75% LTV to offer a BTL mortgage (that is, you'll need a deposit of at least 25%). A lower LTV will give you a better mortgage offer, of course.

    I'd be cautious about "expected house price growth" and making assumptions about your capital growth. Ultimately you should be looking at BTL as a business, rather than an investment. You'll also need to be really careful running the numbers to make sure that they make sense for you.
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    Are you saying that you are going to put down a maximum deposit of 30k and keep the 120k for funding it during voids? *Also, which part of the uk are buying ?*
 
 
 
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