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buy to let mortgages

Discussion in 'General Discussion' started by Lulu, Oct 14, 2009.

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  1. BRID

    BRID Has name in red. Staff

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    Listen to this man.

    Remember all this works on 'assumptions' that your house will be let out all the time, nothing horrific will go wrong, and you wont get tenants from hell. People bought houses in 2007 and were still convinced houses could only ever go up in price .... now tens of thousands of people have been turfed out their homes when that all went tits up.

    Any investment carries risk.
  2. Oasis

    Oasis Peter North-east

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    you dont get turfed out of your home if houses prices go down though brid? The mortgage payments will of actually been lowered in this time. People got turfed out of there homes because they couldn't afford to pay there mortgage/s.

    If you bought a house in 2007 and plan on keeping it for 25 years then I very very much doubt the house would cost less after this time.
  3. Natalie

    Natalie Registered User

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    Vinny based his figures on interest only though, so you would still owe the bank £75k at the end of the 25 years and wouldn't own the house outright so you would just have the 15k plus initial deposit plus any potential house increase which may of course go down
  4. Oasis

    Oasis Peter North-east

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    Why pay interest only? a normal mortgage wouldnt be much more tbh. You wouldnt be making owt from the rent but you'd still own the house at the end of it.

    It has its risks for sure but every good investment does.Its not to be jumped into lightly. But if you have guaranteed rental for years to come then I'd say its a pretty good option.
  5. BRID

    BRID Has name in red. Staff

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    Not true. Your mortgage agreement has clauses in it about maintaining a minimum level of equity in the property.

    People have been kicked out of their homes by banks like natwest after getting letters telling them that because they are in negative equity then they have broken the terms of their agreement and have 90 days to find another mortgage.

    ..... because nearly every mortgage from 80-100% was then yanked from the market, people couldnt even sort out a new mortgage and were kicked out their homes.

    The whole 'i'll keep paying the mortgage and sit the whole thing out' aint quite as simple as it sounds.
  6. Shortee

    Shortee back of the net

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    I can see everyones point

    In my opinion you need a decent deposit, repayment mortgages are a hell of a lot more repayment per month than an interest only mortgage

    Pike - fair enough saying grab any mortgage you can but you still need to make sure its a legit mortage, look at that property scam a few month back with North East Property Buyers. I know a few investors who got mortages through their "sister" company and they are being taken to court, losing their "investments"

    You need to go with a "proper" mortgage company and buy a house in a poular area where there is a demand for both council and private renting to guarantee rent, in Pete's case he has a guaranteed tenant but not everyone is as lucky as that.

    If anyone else wants anymore advice I know a really good independ financial advisor who specialises in investments/mortgages, he searches 99% of the market :D
  7. Natalie

    Natalie Registered User

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    i know that, i have a repayment mortgage on mine and overpay on it almost as much as i am getting in rent bar keeping back some each month as a buffer fund for maintenance payments and any repairs that need doing so it will hopefully be mortgage free in 10 years so that i dont make a profit each month but will own the flat outright quicker and once i do will make the amount of rent i get each month as i dont need the extra cash right now.

    i was simply pointing out that in vinnys example you wouldnt own the house outright :D
  8. Congay

    Congay Registered User

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    Ps. PMSL @ Oasis parents selling their house and pissing his inheritance up the wall :lol:

    What a crease
  9. Vin

    Vin Registered User

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    Sorry to be arsey, but no i didnt forget anything.

    As Natalie spotted, i said interest only.

    If your rent covers a repayment mortgage with something to spare for maintenance, then great.

    With my example, a repayment mortgage would be £483 per month, only leaving you £17 a month for voids and maintenance/repairs. Not enough

    But it is a very rough example. I havent really checked the numbers.


    Interestingly, houses are actually rose 558% from 1983-2008 according to the Halifax HPI. If it does that again over the next 25 years you will be quids in! Thats a lot more than 30%.
  10. Phil Mitchell

    Phil Mitchell check me a dollar brer?

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    If you need to come and ask for advice about it on this message board then you shouldnt be getting involved.

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