First-time landlord and first-time buyer purchase buy to let together

We were approached by a father and son looking buy their very first rental property together – a three-bed terraced house in a popular Home Counties town.

The father is retired on a modest pension of around £10k pa and has a large pot of savings, some of which will be used as the deposit.

The son is unemployed still living happily at home with his parents.

Despite his advanced age and earnings of less than £25k pa, as the father owns the family home outright, the lender deemed him a good risk as the main mortgage applicant, particularly as he had a deposit of 45%.

The father wanted his son to be named as the second applicant in order to get him onto the property ladder.

We approached one of the leading, mainstream buy to let lenders which will accept borrowers up to the age of 90 at the end of the mortgage, and the following rate was offered:

Property value: £365,000

Loan amount: £237,250

LTV: 65%

Rate: 2.19% 2 year fixed

Term: 25 years

Borrower: Joint application: 2 x personal borrowers

Interest only or capital & interest: Interest only

Mortgage payment: £432 pcm

Lender arrangement fee: £1,995

Rental income: £1,200 pcm

Gross yield: 4% pa

Consultant: Chris Longhurst, 01732 471607

5th April 2016