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I am thinking of taking 20% Equity loan, 10% Deposit and 70% mortgage to purchase the property of 510K in London. I came to the choice between 2 years deal or 5 years deal now. I would like to clear the equity loan asap and I will make extra cash to pay off some of the equity loan in a few years. With 2 years deal, I will pay off all the equity loan with cash contribution and incorporating the rest into remortgage at the end of 2 years. In doing so, I can possibly pay off the loan before the property price goes up too high. However there is a risk of interest rate increase in coming years so taking 5 years deal now with relatively low interest rate could be an option too. With 5 years deal, I can secure the good-ish interest rate and I can make 10% equity loan repayment at some point within a few years. After 5 years I will take the other half of 10% equity loan into remortgage. The risk here is that in 5 years time, if the property price goes up the repayment portion of equity loan could increase as well. My question here is whether I focus on equity loan repayment asap (with the fear of property price goes up) or securing the good interest rate product for 5 years(with the risk of interest rate going up). Thanks for your advice!!
Help to buy and LTD company mortgage?
JordanS posted a topic in Mortgage AdviceHi all, This is my first post and I hope someone can help! My gf and I is looking to buy our first BTL property under a limited company and I understand that we will need to do personal guarantees against the mortgage (which is fine). We both have our own residential mortgages , however, she has a help to buy equity loan on hers. I understand that with HTB you can’t own another property until you have paid off your existing equity loan (or sell the property) . Is this also the case if the property is purchased under an ltd company as it is a separate entity? Many thanks in advance, Jordan
Second home + Remortgage
carlosdici posted a topic in Mortgage AdviceHello Guys! In August 2018 I and my partner bought our first flat (home), We had the help of the Help to Buy Equity scheme. This is a great one bed flat in MCR city centre. The mortgage is a 5 yrs fixed at 2.34% We are planning to have a family at some point and for this, we need the biggest house. adn rent our current flat. We are thinking to buy a second property in 2023 and let this apartment. For doing this, we need to pay the Help to buy first. The bank that holds our mortgage is Halifax and they are offering us an "additional borrowing" of £43.000 at 2.84% for 35yrs at fix term of 3 and 5 yrs Help to buy outstanding amount is £36000 Summary: House purchased in £170.000 An outstanding mortgage with Halifax: £118.662 Outstanding with Help to buy £36000 The bank is evaluating the flat in £190.000 Additional borrowing offered: £43.000 The biggest house needed in 3 years (£250-£300k) (I have some savings) Questions: Do you think is possible to pay the HTB with this additional borrowing and after 3 years refinance the house to get part of the principal for a new biggest house and rent the 1 bed flat? Do you think could be a better idea to get this money to get a buy to let apartment in Manchester Leeds Liverpool and them use this to refinance to get the principal for the house? Many thanks for your advice
Furlough Mortgage Advice
london68164 posted a topic in Mortgage AdviceHi All,I'm just after a bit of advice really. My partner and I had reserved a new build prior to COVID using the HTB scheme and had a mortgage offer ready to go for exchange but the pandemic struck. The build was then stopped and completion window moved from initially Aug-Sep 20 to Jan-Feb 21. Unfortunately my partner has been furloughed and this mortgage offer has since expired. We therefore haven't exchanged and will be unable to do so without a mortgage offer. We are trying to arrange for another mortgage offer but despite being way under the possible affordability threshold of our mortgage (even taking into account my partner's furlough salary) our lender is insisting on a letter from their company to explicitly state that they will be returning to work after the furlough scheme ends in October. Apparently they are viewing the furlough scheme as a 'temporary employment' and therefore need evidence of that they will be bringing people back to work when the scheme finishes. The company is in events which has been very badly hit by the virus and have given very little indication as to whether they will bring back staff in October or start making redundancies. Apparently even if we were to reapply with another lender, they would also require this letter of confirmation. This is despite one salary able to cover the mortgage payments and even the possibility of putting down more than a 5% deposit. I am doubtful that my partner will be able to get this letter because the company doesn't appear to have made many decisions r.e. their staff and the furlough scheme as of yet and therefore without this we are currently unable to get a mortgage offer. Without this we are unable to exchange contracts. So the new build we have been waiting for over a year to be ready and which was delayed because of the virus, is now apparently in danger of falling through completely? Are there any lenders who are offering mortgages without requirement for this return to work letter?I wondered if anyone might be in a similar position and had any advice on how to proceed? Thanks for your help!
Advice for First Time BuyerHello, we are buying our first home and have around 72k in the bank to do so. We are evaluating several options going back and forth and can't decide on the best strategy. Our goals are: 1) get on the property ladder now when prices are stable or declining, 2) build up equity to buy a more expensive house in 4-5years time. Our options are: a) Help to Buy, b) Second hand property with 10% deposit. We like option a because of how much money it saves us in interest (the mortgage rate comes down to around 1.68% - 1.84%) which means we can achieve higher equity. Our mortgage broker says we can remortgage and buy the gov out not to face any selling problems, or if price of the home declines it will make buying out the gov even cheaper. We don't like the stories we hear about new homes and snaggs that people need to deal with and worry about selling the property at a loss in 5 years time. Option b - we like the fact that second hand properties hold value better and maintainance problems can be anticipated to an extent. We don't like the high up front cost and high interest. The stamp duty discount for a property under 500k is great but there are not many nice houses at this price (our family is growing which we need to keep in mind). We like 550k homes but the up front cost would mean we need to part with all our savings. Affordability of mortgage payments is not an issue (I think we could purches a property that's around 680k). Any opinions on this, tips or personal experiences would be extremely helpful and much appreciated. I'll just add that we are in London and looking at areas like: Purley, Epsom, Borehamwood, Watford and Enfield.
Help to buy
cm posted a topic in General property discussionI bought my first property through help to buy and i would like to buy my 2nd property as an investment, can one remortgage the help to buy house and pay off the equity loan or change the mortgage from Help to buy to a normal mortgage?
Advice on changing my residential to a BTL
Louise_S posted a topic in Mortgage AdviceHello everyone, I'm currently just starting on my property investment journey and am looking for some advice please. The story so far . . . I currently own my own home (mortgaged) . . . . the LTV is currently 68% with 96k o/s on my existing mortgage. I currently have around 30k equity in my home. Mortgage payments are currently around £450pcm, rental for my area is currently around £650 / £700pcm (there is currently hardly anything to rent in my area, rightmove currently comes up with 1 property) My partner does not currently live with me but is looking to get onto the property ladder. As he is based in the military its possible for him to apply for a Military Help to Buy loan which is interest free for 10 years. If successful in his application we were considering the option of me moving in with him and turning my current residential home into a BTL, this would become the first property in my portfolio. My question(s) . . . Could i switch from a residential to a BTL without losing the 30k equity in my home / can i release the equity to use to invest in my 2nd property? or would it be better to leave the equity in my home and treat it more as a long term investment and find a different route to finance my 2nd one. Sorry for all the questions but Thank you all in advance Lou
First time buyer
CoryTierney posted a topic in Introduce yourselfHi, I am 24 years old and will be a first time buyer who plans to get in to buy to lets and create a property portfolio and eventually leave my job. As I am a first time buyer I can take advantage of the help to buy scheme etc. I am unsure whether to buy a cheap flat/maisonette (I have my worries with leaseholds) so I can save more towards a second property or buy a property and max out the mortgage I can get to hopefuly increase capital growth, ideally buying BMV if both cases. Ideally I would like to buy BMV, refurb and refinace to put towards a buy to let property. Any advice or pointers would be greatly appreciated. Thanks, Cory