First time landlords purchase 3 investment properties using inheritance money

Written by Agata Lovelock (nee Rogozinska)

The client: A married couple, both receiving employed income, looked to begin their property investment journey. The pair had recently sold a large, inherited property and hoped to use the finances generated as a deposit for their new investments.

The properties: After careful investigation, the clients decided to make their purchases within a popular residential area in Kent with a high demand for rental property. The clients had made an offer on three 3-bed houses which were let to families. To their surprise, all three offers were accepted.

The finance: The clients approached Mortgages for Business to find out whether it was possible for them to secure finance on all three properties and additionally to seek mortgage guidance as first-time investors. The couple required a borrowing of 75% LTV on an interest only basis for each property.

The clients had sought advice from an estate agent to determine whether the rental income would support the mortgage payments. The husband felt it would be in his best interest to resign from his current employment and become a full-time landlord with the aim to buy more properties in the near distant future.

The application process: We collected the clients’ proof of income, proof of address, proof of ID and proof of deposit to support the mortgage application. When searching for lenders we ensured that they accepted:

First time landlords
Lending up to 75% LTV
No minimum income

All three properties underwent a valuation, each with a successful outcome which confirmed the rental income stated by the agents. The lenders we approached felt that the clients had completed sufficient research on the properties and would be able to support the mortgage payments.

Each case was completed within less than three weeks after submitting the application to the lender.

Here are the details:

Property Details

Average property value: £227,433

Average loan amount: £170,575

Average LTV: 75%

Average rate: 2.47% 2 & 5 years fixed

Average term: 25 years interest only

Average lender arrangement fee: £663 added to loan amount

Average mortgage payment: £340 pcm

Average rent: £1,117 pcm

Average yield: 0.8% pa

Consultant: Agata Rogozinska, 01732 471602 or 07976448467