In Which Tengu Learns the Meaning of the Term `Work`.

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Tengu

Full Member
Jan 10, 2006
12,776
1,510
51
Wiltshire
<I can see you all shaking you heads sadly.>

My friend (who has spent 22 years in the millitary and so has less of a grip on reality than me) Has told me I should get a job and do my best to improve my credit rating.

"Whatever for?" says I

"So you can get a morgage"

"Whatever for?" I repeat. I have done very well so far without one. (Not at all being sure what a morgage may be, but a lot of people have them and are made unhappy by them, so I feel it is one of those things best missed.)

"So you can get a portfolio of properties" (She has a whole string of them, all buy to let, no income but lots of headaches)

Hoo ha.

But I have seen some nice places in Devon...they even have POSTCODES.

And she says winning a property at Auction is one of the biggest thrills you can have. I can well believe that.

Is it possible to get a Morgage on a rental income?
 

stevesteve

Nomad
Dec 11, 2006
460
0
57
UK
'Work' is over rated Tengu. Trust me I woke up at 05:00 to drag my sorry @rse to London.
Last call from work was [pauses to check Blackberry] 19:31.

Now it's 00:40 but the good news is that I can sleep as late as I like... so long as I get up at 05:15 when the alarm goes off again.

Like I said 'work' is over rated. I went out to the woods with my boy on Sunday. we cooked noodles on the hobo stove amongst the hazel trees. Time stopped. We made spears and ate.

Work or trees?


Cheers,
Steve
 

rik_uk3

Banned
Jun 10, 2006
13,320
24
69
south wales
If you live in a council owned property with 'Right To Buy' you may get a mortgage as you would have a big discount on the value of the property so if you don't pay they get the house and will get their money back comes sale time.
 

gregorach

Bushcrafter (boy, I've got a lot to say!)
Sep 15, 2005
3,723
28
50
Edinburgh
Is it possible to get a Morgage on a rental income?

Yes (it's called "Buy To Let"), but these days nobody is going to give you one without a hefty chunk of cash upfront. If you'd got in there a few years back, they were giving them away like sweeties - but a lot of the people who took them ended up in negative equity (they owed more than the property was worth). Contrary to popular belief, property is not always a good investment.

[This is not investment advice.]
 

pastymuncher

Nomad
Apr 21, 2010
331
0
The U.K Desert
The buy to letters and second homers are the reason I can't afford a house in Cornwall (my home). I'm not that bothered though because I ended up living on a boat and couldn't care less about mortgages or interest rates or council tax etc etc.

If you really want to have a death pledge (mortgage) hanging around your neck go ahead, what price freedom?
 

MrEd

Life Member
Feb 18, 2010
2,148
1,053
Surrey/Sussex
www.thetimechamber.co.uk
i aspire to own my own house. i have saved with my partner and we are going to start looking after xmas. im fed up of lining landlords pockets year after year after year and want my own place. i think its worth it, i have thought about it a lot in the past 24mths or so, quite seriously.
 

Tengu

Full Member
Jan 10, 2006
12,776
1,510
51
Wiltshire
No, I own my own home, (and a very nice one it is too) which I plan to let. Hence the rental income.
 

sxmolloy

Full Member
Mar 22, 2006
1,432
20
46
lancashire, north west england
I'm happy with my mortgage. It means when the lending term is up I own my house outright, much better than paying a landlord or council rent for 'x' amount of years and having diddley squat to show for your money.
 

gregorach

Bushcrafter (boy, I've got a lot to say!)
Sep 15, 2005
3,723
28
50
Edinburgh
It depends on whether renting is cheaper than your mortgage... If it is, you're paying an "opportunity cost", in that the extra money you're spending on the mortgage could be otherwise invested, quite possibly earning a better return. I've seen many examples where someone would (theoretically) have been better off sticking the difference in a "safe" investment such as fixed-terms bonds. A repayment mortgage is basically just an enforced savings scheme where you lose your house if you don't keep saving at the rate you thought you would. Under normal circumstances, you're usually better off sticking any spare cash in something like an ISA rather than using it to pay off more of your mortgage, because that way the compounding of interest works in your favour (current lousy interest rates mean that these are not normal circumstances though, so do the numbers or get proper advice rather than taking my word for it).

However, in my case, my mortgage is less than I would be paying in rent, so it's a non-issue for me. I maybe would have been better off taking an interest-only mortgage and putting the difference in my ISA, but it's a riskier proposition.

[I am not a financial advisor, and this is not investment advice.]
 

TeeDee

Full Member
Nov 6, 2008
10,447
3,652
50
Exeter
Tengu , Have you checked your own credit rating online yet?? As mentioned your own history and paper trace of credit transactions will assist in securing financial funds as currently the Banks are very, very skittish about lending ( but its improving ) this will assist when you apply for your NEW PPR Mortgage.

If your talking about letting your current owned property you need a LET-TO-BUY Product ( not a BUY-TO-LET ) which will then allow you to apply for a PPR Mortgage when you find the right property.

http://www.mortgages.co.uk/Let-to-Buy/Let-to-buy-Mortgages.html

I'm on the side of Pro-property as its allows massive leverage for minimal capital input, however leverage can and sometimes does work both ways.



Edit;- The above is not financial advice as I'm not a financial advisor or Mortgage broker -Legal stuff!!
 
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TeeDee

Full Member
Nov 6, 2008
10,447
3,652
50
Exeter
Not without a job.

Martyn , I'm not sure if that is entirely true, if the situation is that Tengu has a property which was her PPR Which she wishes to change to a Let-to-Buy I think ( or it was correct a while back , may have been pulled by the financial product suppliers ) that there may well be products still available to do this.
From the Banks point of view they would rather loan on a mortage free property to release a percentage of the equity as opposed to a new BTL Purchase.

Not trying to pick holes , just attempting to give Tengu the response and answer most applicable from info in post #10.
 

TeeDee

Full Member
Nov 6, 2008
10,447
3,652
50
Exeter
Tengu, a PPR for most ( 95 % ) of homeowners just refers to their home or household , the reason I'm calling it PPR Is because your are contemplating changing your current home ( your PPR ) To a LET-TO-BUY property , which will then mean you can once the paperwork is done and dusted look for a new home in Devon which will then become your new PPR and you will be able to attempt to source finance for a PPR Rather then a 2nd home.

Its important to understand the difference because there is tapered Capital Gains tax relief ( see link ) on your OLD ppr if and when you sell it.

PPR = principal private residence
http://www.holidaylettings.co.uk/re...ef:-principal-private-residences/a-1-29-1762/

Let-to-Buy Calculator. http://www.godirect.co.uk/mortgages/let-to-buy-mortgage.php




When i say Pro-property , it just means i advocate property as a suitable long term investment over other things ie my personal view.
You really need to speak to a good independent broker who charges a flat fee up front , again just my views from experience.

HTH
 
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helixpteron

Native
Mar 16, 2008
1,469
0
UK
Thanks for the advice guys.

What is a pro property?

and a PPR?

In aviation terms, 'PPR' means that Prior Permission (is) Required before visiting a specific airfield or landing site.
happy0054.gif


However, I suspect that it has a different meaning in the finance world!
 

pastymuncher

Nomad
Apr 21, 2010
331
0
The U.K Desert
as far as i am aware as long as you dont have power and water(mains) hook up aswell

Depends on how it is set up, marinas and boatyards have electric and water. You can spend an awful lot of time on your boat wherever it is moored, but you may not want to call it your home;)
There are numerous ways of cheap living on boats, it just requires a little imagination and finding others who are already doing it for the info.
 

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