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  • Mortgages & Finance

    Am I a first time buyer?

    Hi Guys,

    I have  a few btl properties but no residential home.

    Do I classify as a first time buyer if I plan to buy a place to live?

    And can I use the gross rental income on applications? (Only income I have)

    Thanks much

    Pete

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    Hardly makes a difference to be honest, if you work with an independent mortgage adviser.

    Many 'standard' deals beat FTB'er mortgages hands down.  H2B is not the holy grail, guarantors now mean the SD surcharge is payable in most cases etc.

    By the way, you would now have to pay the SD surcharge for your resi as well, irrespective of whether the property being purchased is a BTL or a house for you to live in.

    So, assuming your query is mortgage related, and especially with the income quirk you mention too, I would suggest your first port of call is a professional mortgage adviser, and of course we would be pleased to help at http://www.PTFS.co.uk


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    Thanks much!

    Yes, for mortgage purposes indeed.

    I was also wondering about the LTV ratios as well, as for residential mortgages a 90% still something around but for btl it's not so much.

    And Income requirements should also be different or am I missing a point here? For residential I do not need to worry about the rental cover being 125% either?

    Thanks much,

    Pete

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    Hi,

    One more thing came to my mind:

    Would I qualify to different home buyer schemes? or packages offered by developers for first time buyers? (5% deposit and the rest)


    Thanks!

    Pete

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    No, not if you already own property Pete!  Those schemes are to assist people to buy their first house.  Help to Buy is being discontinued anyway.

    A developer may have some kind of special offer for a first time buyer, like a free furniture pack, but that's just about all there would be.  They might offer a 5% gifted deposit, but my experience is that the valuer just down-values the property by 5%.  Either way, you would need a mortgage lender who would allow a 5% gifted deposit, and I don't believe there are many of them around any more.

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    Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **5 reasons to get your FREE portfolio review NOW**

    Hi Pete,

    I'm afraid there would be little to no chance of using gross rental income.  A lender would look at the net profit figure, usually from your SA302's, backed up by your Tax Year Overviews for the past 2 years at least.  This would be a difficult case to place because many lenders would be wary of rising interest rates.  A mortgage has to be shown to be affordable; what would happen if interest rates were to rise?  Your net profit would decrease and your mortgage could become unaffordable.  Furthermore, have you considered your position regarding the impact of the forthcomming taxation changes for BTL landlords?  This potentially could have a bad impact on your income.

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    Hi Guys,

    It seems I forgot to reply to the thread, sorry about that, slipped out of my mind.

    So, to summary, I would not be classified as a FTB, even on top I will have to pay the SD surcharge even though I am buying my "first" residential property. At least in the last 10 years.

    I am abroad, and tried to find the up to date requirements for buying residential property in the UK but I only get expat mortgage links (annoying, ah) Anyone could shed some lights, what are the most up to date requirements (deposit? 10%? or less? income multiplier? 4.5x? employment? for how long? 3Months or 6 Months minimum?) Thanks heaps!

    I also wondered if it favors me that I have a BTL portfolio or in fact it is against me to get a good residential mortgage?

    I am returning to the UK shortly and would like to prepare in advance as much as possible (with funds, knowledge, contacts to go to, etc)

    Thanks very much in advance

    Pete

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