90 LTV investment advice?

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    90 LTV investment advice?

    HI guys, I'm new to this forum and new landlord.
    I have 1 property I bought few years back at 75 ltv but since moved out and renting it, whilst still at residential mortgage.
    I'm currently buying another house at 90LTV with intention to rent out and seek consent to let in few months.

    Now my plan is : once I finalize the 90LTV house and after getting consent to let I will buy another house at 90 LTV... and then another.
    Will that work ? Is there any risk that lender won't give me consent to let when I have multiple mortgages at 90 LTV? is there a risk that lenders will refuse to give me another 90 LTV even if others are let out ?

    Appreciate constructing feedback ;-)

    #2
    I'm curious. What happens to 90% LTVs when property prices slip by 20% or 25%? (or when they turn into Assured Lifelong tenancies under a Marxist government, and fall by a further 50% below the already depressed market value).

    Comment


      #3
      When properties fall it's irrelevant, it's what happens with rents and rates that matters, plan B is as rates are going high then start repaying aggresively (I can afford that) and remortgage them for say 30-35 years.

      also when properties fall I'll carry on buying, given repayment is lower than rental, so that will even out the prices.

      Comment


        #4
        It was highly leveraged investment, not so much the actual stock market fall, that bankrupted people the great Wall Street crash.

        Also, have I misunderstood you, or are you pretending to buy as owner occupier?

        Comment


          #5
          Originally posted by leaseholder64 View Post
          Also, have I misunderstood you, or are you pretending to buy as owner occupier?
          Yes. Then seek consent to let in 3 months.

          If it's a car crash, tell me how.

          I was actually thinking of buying half repayment , half interest only portfolio, but actually have more properties faster than saving for huge deposit and SDLT for BTL each time

          Comment


            #6
            Originally posted by diseasex View Post
            When properties fall it's irrelevant, it's what happens with rents and rates that matters, plan B is as rates are going high then start repaying aggresively (I can afford that) and remortgage them for say 30-35 years.

            also when properties fall I'll carry on buying, given repayment is lower than rental, so that will even out the prices.
            Good luck with that small irrelevancy...... you might want to go and study a little economics and history as leaseholder64 suggests

            Comment


              #7
              Originally posted by AndrewDod View Post

              Good luck with that small irrelevancy...... you might want to go and study a little economics and history as leaseholder64 suggests
              Thanks I’ve already done that. Even 50% drop wouldn’t ruin me, I’m placing a bet on certain area and not your business what I’m doing with my money and what’s my risk appetite or strategy to reduce risk

              now back to original question: is having multiple 90 LTV mortgages possible or do I need to repay them to 75ltv before taking another ?

              Comment


                #8
                No but lenders will care about that and your first 90% LTV is likely to be your last. Again, the best of luck.

                A 50% drop on a few 90% LTVs mean that you are in the red to the tune of 40% of the total value of your portfolio. I'd call that pretty much "ruined" with no way out -- but hell, definitions differ.

                When your rental income falls below your mortgage bill, the banks re-possess the whole lot and sell it to other folk.

                Comment


                  #9
                  Originally posted by AndrewDod View Post
                  first 90% LTV is likely to be your last.
                  Do you know anyone that tried perhaps? Or is this rule written anywhere? I’m not trying to be rude, just looking for information.

                  Originally posted by AndrewDod View Post
                  When your rental income falls below your mortgage bill, the banks re-possess the whole lot and sell it to other folk.
                  ​​​​​​​now that is hard to believe to lose property just like that

                  Comment


                    #10
                    Yes, just like that...

                    You: My strategy is to own 10 properties at 90% LTV
                    Mr Bank manager: That sounds like a plan
                    You: The properties will be £100K each and I will pay £10K of that. The rental yield will be 4% and all expenses around 1% of V.
                    Mr Bank manager: That sounds like a plan
                    You: So I will get in £40K per year and my expenses will be £10K. I'll pay around 10K in tax, so will be left with £20K
                    Mr Bank manager: That sounds like a plan
                    You: At current mortgage rates with repayment mortgages over a 25 year term (the only kind you will give me) my mortgage bill will be £22K per year and my repayments £36K/year. So in fact I won't pay any tax so please revise my net income figure before mortgages to £30K
                    Mr Bank manager: That sounds like a plan. What happens when prices crash to even 50% and rental yields decrease accordingly, and when mortgage rates rise to 6%
                    You: That is totally irrelevant. Even 50% drop wouldn’t ruin me, I’m placing a bet on certain area and not your business what I’m doing with my money and what’s my risk appetite or strategy to reduce risk.
                    Mr Bank manager: That sounds like a plan. You do realise that when you can't pay your mortgage we take the properties back and sell them on the open market. Even that will not allow you to repay the loaned capital so you will be bankrupted.
                    You: Now that is hard to believe to lose property just like that. Really, you actually do that?

                    Comment


                      #11
                      Gosh. What is it with these forums
                      My strategy is to own 2-3 90 LTV properties at any given time (if that's even possible) and overpay them quickly within 2 year fixed period to 75LTV then turn them to interest only potentially. Comprende? That’s not rocket science jeez. All you do is ‘what if there’s black swan event?’ Is it the best you got ?

                      Comment


                        #12
                        Good luck again with the swan

                        Comment


                          #13
                          My Monday morning has been spoilt by the OP’s comments. This is a blatant attempt to circumvent the legal declarations made on mortgage applications. Lenders are not fools and it is my sincere hope that anyone who pursues such practices of buying with a residential mortgage and then tries to get a Consent to Let when such declarations are fatuous are identified and be placed on the Hunter System as well as having to repay the associated borrowings.
                          Diseasex please do not respond to this posting as I will not give further oxygen to your ideas to be a landlord by undertaking such dubious measures.

                          Comment


                            #14
                            No facts, no links , no quotes, no precedents just wishy-washy, however strongly opinionated, answers so far. What evidence do you have it’s not allowed or not possible?

                            Comment


                              #15
                              Final words, I was a lender for 50 Years , general Manager of a leading Building society for the last twelve years and broker for 11 years. I know what is right and definitely wrong

                              Comment

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