Advise needed on new possible purchase

[Cautious One]

Hi All,
If anybody can offer any advice it would be appreciated, thanks.

New property, offer accepted £210k. Repossession and had agent round who valued property at £275k, which I believe in current market is correct.
Rental is around £850-900 less £120 maintenance charge.

If we bought and could not re-sell, what is the maximum mortgage I could get on this and do the maths work for renting it out !

Appreciate any guidance as new to this !!

Thanks

[welshgold]

Rental is around £850-900 less £120 maintenance charge.?


clarify period

[Cautious One]

Its an apartment, there is a monthly service charge, includes building insurance and looking after the grounds etc.!

[Matt Churchill]

If you bought and could not re-sell you would be able to get around 75/80% depending on lender. This would be based on the valuation of the property. Whilst you have an agent saying £275k, it may well be valued a little lower for a Bank (a whole other story).

However, on a rental return of £730-780 per month, you would be way off on the coverage the lender would want to see. Normally, you would need to have around 125% net cover on repayments. Say you went for 75% of £275k, which is £206k, I would guess your loan payments could be £1300 per month, which leaves you well short on serviceability, and also IMO make the deal less attractive anyway. Unless ofcourse you can find someone to do interest only.

Naturally, if you have your heart set on it, and have other properties the lender could look at or supplemental income then it could still be achieved.

HTH

[Cautious One]

Thanks, renting would only be a back-up if we could not sell. From the figures it looks like it would have to be interest only. Is it hard to get an IO on a buy to let mortgage please? and could I release around £160 equity out of it.

Thanks

[Matt Churchill]

Is it hard to get an IO on a buy to let mortgage please? and could I release around £160 equity out of it.
Can be harder to find, but is possible I think. £160? Do you mean £160k from the property value? If so then I would say it is totally possible.