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  1. #1
    G Guest

    Difference in normal mortgage and a buy to let one

    Im not to hot on these things, and there is a fair bit of jargon knocking about. However, what is the main difference between a normal mortgage and a buy to let one?

    Yeah I think im getting old and investing in bricks

  2. #2
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    Generally the rates on a buy-to-let are higher, cause it's seen as more of a risk.

    Worth pointing out that (at least when I did my research - 4 years ago now, lot has changed since) most normal mortgages will exclude you letting your house as one of the conditions. I had a normal mortgage initially, but when I moved out of the house and wanted to start letting it, I needed express permission from the lender (which they charge you for) and they also wanted to bump me off my lower promotional interest rate, onto their standard rate, which at the time was something stupid like 8%. In the end I got a much better deal moving off onto a buy-to-let mortgage.

    I would definitely recommend getting some free, impartial advice from a mortgage specialist before making any decisions. Don't go direct to a bank or building society, cause they'll tell you all sorts to extort money out of you! I dealt with a company called London and Country who were brilliant, saved me absolutely shitloads on my rate and dealt with my application all the way through

  3. #3
    G Guest
    Theres actually a firm which a lot of forces people deal with in the area, like 20 miles away. I had a good old chinwag with them over the phone and they sent a bit of stuff through on the old email as well. Its more so research at the minute, but as soon as I get back off a deployment I want to have the knowledge to be able to go BAM house bought.

    When renting what is the best way to go about it, I know agencies take a % cut, or do you pay them a fee? As Im thinking of having my dad as my representive of the landlord, as Im still going to be down south, and thinking of getting something in my hometown up north.

    Anyone else got yet more good advice, and thanks for your post Lady K.

  4. #4
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    Quote Originally Posted by Kaff View Post
    I needed express permission from the lender (which they charge you for)
    THAT'S WHAT I DO AT WORK

  5. #5
    Join Date
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    Quote Originally Posted by Knee High Stripy Socks View Post
    THAT'S WHAT I DO AT WORK
    Give her the money back then
    I've got plenty of baggage and i don't expect anyone to carry it for me. But you can have a good rummage through it if you'd like.

    katralla - That's right, I am Kev, and I am a slut.


    Munkey, Ruudy & Friends

  6. #6
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    hahaha different bank

  7. #7
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    Quote Originally Posted by G View Post
    Theres actually a firm which a lot of forces people deal with in the area, like 20 miles away. I had a good old chinwag with them over the phone and they sent a bit of stuff through on the old email as well. Its more so research at the minute, but as soon as I get back off a deployment I want to have the knowledge to be able to go BAM house bought.

    When renting what is the best way to go about it, I know agencies take a % cut, or do you pay them a fee? As Im thinking of having my dad as my representive of the landlord, as Im still going to be down south, and thinking of getting something in my hometown up north.

    Anyone else got yet more good advice, and thanks for your post Lady K.
    I would definitely go for a new buy-to-let mortgage than trying to tack 'permission' onto your existing one. We did exactly that through The Woolwich, and their buy-to-let rate was only 0.5% higher than Barclays' base rate.

    On the question of agents, you can pay the agents to find you the tenants, collect the rent and administer the deposit, or you can pay them to 'manage' the property for you, i.e. take care of maintenance, repairs and cleaning. In either case, its worth shopping around as some agents will take a year's fees upfront(!), some will split it in two, and some will take it quarterly. Makes a big difference to cash flow and income! Whether to go for the "managed" option entirely depends on your (or your dad's) ability to deal with any problems promptly.

    One of the reasons we have decided to sell up, is that we found it difficult to manage our property from a distance, and we didn't want to have to pay the agent's exorbitant fees. Also, however good your tenants are (and our last lot were a lovely bunch of young City types), there will inevitably be damage and wear and tear that needs to be taken care of before the property is re-let.
    Last edited by overthehill; 13-06-2010 at 01:09 PM.
    "God, give me the Grace to accept the things I cannot change, Courage to change the things I can, and the Wisdom to know the difference."

  8. #8
    Join Date
    May 2010
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    5
    Some ordinary mortgages do allow the property to be rented out for a limited number of years, without an additional penalty of extra interest. You need to decide exactly what you want to do, i.e. buy a property to live in and only rent it out if you get posted abroad, or buy it to let it out on a permanent basis. If the latter then get a Buy to Let (BTL) mortgage, don't be tempted to fiddle and get a normal residential mortgage - it isn't worth the grief if the mortgage company find out. Certainly do shop around and read the small print about making extra payments off the capital as some mortgages allow it, and it can save you a lot of money in the long run. Others don't allow it or charge extra fees for their loss of interest.

    Good Luck

  9. #9
    G Guest
    Cheers for the advice guys!

    Well the good thing is, my uncle is an ex professional handy man good for repairing like plastering, wallpapering, all sorts, and a good few friends who would happily have business sent their way (plumbers etc). With the intent of having my dad as the management.

    I think I would like the idea of the letting agents finding the tennants. However Im seriously tempted to rent out to students, so a regular splurge of easy to find residents.

  10. #10
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    Quote Originally Posted by G View Post
    Well the good thing is, my uncle is an ex professional handy man good for repairing like plastering, wallpapering, all sorts, and a good few friends who would happily have business sent their way (plumbers etc). With the intent of having my dad as the management.
    I think this would be brilliant if it worked. My experience with agents wasn't great. I paid them a percentage of the rent plus fees for everything you could imagine, and didn't see much in way of return for it! They were supposed to fully manage the property, but they were still ringing me nearly every day to tell me that the tenants thought the house was too bright, or one of the doors was too squeaky or whatever. Plus when they had work done they seemed to pick the most expensive of people to do it, and most times the problem would not get fixed. Rubbish.

    If your dad and uncle are trustworthy and reliable, you'll save yourself a packet in both money and stress!

    Letting to students is different to professionals, but not necessarily a worse idea! They probably won't look after your property quite so well, but on the flip side, they won't be as demanding, and there's always a ready supply. You'd probably want to know in advance which you were aiming for, and buy the property to suit.

  11. #11
    G Guest
    Yeah my uncle is always looking for stuff to keep him busy, its funny seeing him and my dad argue, my uncle comes over to get my dad to change his oil etc and services, uncle tries to pay my dad, dad says fuck off.

    Same as when uncle installed the new kitchen a few years back at my parents, dad tried to pay my uncle, uncle said bugger off

    My uncle plays golf and drives about 4k miles a year at most

    I think im aiming at students, mainly for the regular supply, plus if I ended up with a bunch of cocks, they are not going to be around for ever

    Plus Id actually be a genuinely nice landlord, after all the horror stories ive heard over the years, and the fantastic landlords Ive been lucky to have, wouldnt harm to be nice.

  12. #12
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    Quote Originally Posted by Knee High Stripy Socks View Post
    hahaha different bank
    Plus I never paid them anyway

  13. #13
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    Apr 2002
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    Shocking behaviour!

    speaking of which there are 3 banky letters here for you, on top of your cousin's exercise bike

  14. #14
    G Guest
    ID theft?

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