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  1. #251
    Members Uncle Spielberg's Avatar
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    Quote Originally Posted by Renegade1 View Post
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    Hopefully Triggaaar will explain how he was able to borrow 275K.

    If we took an average 2 bed flat at £900 per month then that's only a £43.200 mortgage if you times it by 4.
    I assume this is what you meant and it's 4 x yearly rent paid?
    Ignore any buy to let mortgages arranged before 2017 everything has changed
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    • #252

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      I'm late to the party but have a look here guys to give you a rough idea - play around with the numbers

      http://www.themortgageworks.co.uk/pr...to-borrow-calc
    • #253
      Resident pedant Triggaaar's Avatar
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      Quote Originally Posted by Renegade1 View Post
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      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?
      My deposit wasn't even 25%, and I could borrow on a lot, but that's pre credit crisis, things aren't so easy now.

      If you for example had 100K, would you use that for a deposit for one property or go for 2 or even 3?
      Yes, you could in the past.

      Is there any relevance to the capital you have in your own home?does it help?
      Not really, unless you use that for an equity loan etc, and use the capital to buy more. In the past you didn't even have to prove your income. I got a monster mortgage from Northern Rock without any checking. I paid it back though, so not my fault they went bust.
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    • #254
      Resident pedant Triggaaar's Avatar
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      Quote Originally Posted by Renegade1 View Post
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      Hopefully Triggaaar will explain how he was able to borrow 275K.
      What again?
      Quote Originally Posted by Triggaaar View Post
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      The rent was something like £1,200 a month, the mortgage was less than £1k (interest only). That's all they needed.
      If we took an average 2 bed flat at £900 per month then that's only a £43.200 mortgage if you times it by 4.
      I assume this is what you meant and it's 4 x yearly rent paid?
      No, again:
      Quote Originally Posted by Triggaaar View Post
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      As explained above, it's not worked out like that.

      4 times your personal income is used for you home, because you also have to use your income to pay for everything else in life - council tax, gas/elec, water, food, car, clothes, etc etc. With a rental property, the rental income has to cover the mortgage and it doesn't need to do much more than that. So companies used to ask for rental income to cover 125% of the mortgage, allowing for interest rate rises. The last btl I bought cost 325k, and I got a 275k mortgage for it.
      So with your example, an average 2 bed flat at £900 per month:
      If the mortgage required the rent to cover 125% of the cost, then that rent would cover a mortgage cost of £720 a month. That's £8,640 a year. If your mortgage rate was 5% interest only*, that would allow a mortgage of £172,800.

      * I'm not sure what affordability calculations the companies are using at the moment.
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    • #255
      Resident pedant Triggaaar's Avatar
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      Quote Originally Posted by Uncle Spielberg View Post
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      Ignore any buy to let mortgages arranged before 2017 everything has changed
      Cool - what are the new rules? From the point of view of getting the largest mortgage you can on a BTL, what's the best you can get?

      Just found this, is it out of date or still applicable?
      http://www.themortgageworks.co.uk/pr...to-borrow-calc


      Quote Originally Posted by worthingseagull View Post
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      I'm late to the party but have a look here guys to give you a rough idea - play around with the numbers

      http://www.themortgageworks.co.uk/pr...to-borrow-calc
      Ok that's freaky.
      Last edited by Triggaaar; 14-03-2018 at 15:01.
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    • #256

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      Can you buy two properties with one BTL mortgage?So you have your deposit,your salary,you give the earnings from rent on TWO properties,you borrow the max then you buy two properties?

      I ask this because if it is still correct the smaller the property the better the returns so two small 1 beds will earn more than 1 x large 2 bed?Taking
      into account the 1 beds together cost the same as the 2 bed.
    • #257
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      Quote Originally Posted by Renegade1 View Post
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      Can you buy two properties with one BTL mortgage?So you have your deposit,your salary,you give the earnings from rent on TWO properties,you borrow the max then you buy two properties?

      I ask this because if it is still correct the smaller the property the better the returns so two small 1 beds will earn more than 1 x large 2 bed?Taking
      into account the 1 beds together cost the same as the 2 bed.
      No you would need 2 mortgages
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    • #258
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      Quote Originally Posted by Triggaaar View Post
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      Cool - what are the new rules? From the point of view of getting the largest mortgage you can on a BTL, what's the best you can get?

      Just found this, is it out of date or still applicable?
      http://www.themortgageworks.co.uk/pr...to-borrow-calc


      Ok that's freaky.
      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
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    • #259
      Resident pedant Triggaaar's Avatar
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      Quote Originally Posted by Renegade1 View Post
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      Can you buy two properties with one BTL mortgage?So you have your deposit,your salary,you give the earnings from rent on TWO properties,you borrow the max then you buy two properties?
      No, two mortgages, and each mortgage will have a legal charge on the property they apply to, so you can't sell it without paying off the charge (the mortgage).

      I ask this because if it is still correct the smaller the property the better the returns so two small 1 beds will earn more than 1 x large 2 bed?
      Each property is different. Work out everything, how much the property costs to buy, how much the mtg will cost (setup and monthly), how much maintenance costs, how much it will rent for and how easily, how often the tenants will stay, what type of tenant you get etc etc.

      It's generally more effort to look after two smaller properties, so you might want a slightly better return, but I doubt there's much in it.

      So is this all for someone else, or are you wanting to do it or what?
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    • #260

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      Quote Originally Posted by Triggaaar View Post
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      No, two mortgages, and each mortgage will have a legal charge on the property they apply to, so you can't sell it without paying off the charge (the mortgage).

      Each property is different. Work out everything, how much the property costs to buy, how much the mtg will cost (setup and monthly), how much maintenance costs, how much it will rent for and how easily, how often the tenants will stay, what type of tenant you get etc etc.

      It's generally more effort to look after two smaller properties, so you might want a slightly better return, but I doubt there's much in it.

      So is this all for someone else, or are you wanting to do it or what?
      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
      extra hassle having two instead of one would be for the extra you would get.
      Pretty sure I would go for 1 nice flat.

      Will also look into an equity release loan should I want to buy another.
      Basically that's just a re-mortgage?
      I am with Nationwide who don't lend for BTL so would have to change.

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