Buy to let mortgage

Chris · Post by **Chris** » Mon Jun 04, 2007 1:23 pm

Is it feasable / possible to arrange a buy-to-let mortgage on a villa in Portugal that is supported from the rental income, i.e not being in a position to support the mortgage with a UK income.

A long shot perhaps...

but Thanks for any advice.

ANDY · Post by **ANDY** » Mon Jun 04, 2007 1:40 pm

Yes but you need to find 30% of the proprty price. Banks here will only lend 70%

Chris · Post by **Chris** » Mon Jun 04, 2007 1:54 pm

That's good news, I can then investigate further. Is is possible to use holiday let income, rather than longer term lets.

Thanks.

ANDY · Post by **ANDY** » Mon Jun 04, 2007 2:45 pm

Yes, but you may have to show them projected figures from an agent or agency. Please feel free to PM me if you have any other questions.

fmm · Post by **fmm** » Mon Jun 04, 2007 3:06 pm

plus, don't forget if you want to rent, that you have to have all the right paperwork to licence your property.

e-richard · Post by **e-richard** » Mon Jun 04, 2007 3:20 pm

Chris, I cannot answer the technical questions, but you should budget on the fact that in some years your rental income may fall short of your mortgage. Nobody can guarantee a full booking list year after year and sods law also states that the year that you have light bookings is the year you have to do some major repairs as well.

I don't want to put you off buying, but it would be wrong for anyone here to assure you that you won't have to fork out additional funds to keep a property on the Algarve.

But if you do afford it, its well worth it

Chris · Post by **Chris** » Mon Jun 04, 2007 3:54 pm

Thanks for the advice so far, all thoughts, opinions and suggestions greatfully received.

We have the option to purchase a property that has been in the family for many years and let out. It seems like a great opportunity, but I know that proving to a mortgage company on an income basis we would struggle due to our UK mortgage.

I understand that if we struggle to let the property we may have to make up the shortfall ourselves and this should not prove to be a problem. It just seems like too good an opportunity to let slip away too easily.

The next stage is to get some figures together for running costs etc, which has been discussed here in the past.

Thanks Again.

tbbr · Post by **tbbr** » Mon Jun 04, 2007 5:44 pm

HAving just taken one out we can tell you that a mortgage in Portgal is based on ablity to pay ( Ie Nett income after any existing mortgages loans etc ).
They carry out credit checks ( experion etc ) need at least 3 months wage slips, details of any bank accounts investments etc.

They were simply not interested in rental income, this being too irregluar to be considered.
Having said all that we found Santader Totta to be very helpfull and informative.

Don,t forget to budget for your set up, legal and insurance costs.

To get the best interest rate you will need to keep a min balance,use theirdebit card and open an investment account as well.

Still better than Barclays.

Pabbers · Post by **Pabbers** » Fri Jun 08, 2007 8:29 am

Is there any chance you could raise the money on your existing home? We did that to buy our property - obviously it means you put your home at risk if you can't afford the mortgage but it may be a thought.

fmm · Post by **fmm** » Fri Jun 08, 2007 9:55 am

Have you got a licence to let the property out? If you don't then you will not be able to rent it under current laws.

Michael Crane · Post by **Michael Crane** » Fri Jun 08, 2007 11:25 am

I don't have a property in the Algarve . . . but one day I hope to be in a position to do so. I think this is a very good topic and one deserving its own section. I am sure there's a lot more to know about the 'problems' of buying to let.

How about it, Steen. A separate section - perhaps Moderated by a local or someone that is knowledgeable about the topic? This way, all pertinent information would be in one place and thus negating the need for endless searches and trawling through pages of comments to find the one you want.

Chris · Post by **Chris** » Fri Jun 08, 2007 2:18 pm

Thanks for the information so far. A seperate section does sound like a good idea, as everytime I search the internet I tend to come up with different answers to the many questions.

The forum is a useful place to seek advice and help.

Keep up the good work..

Gerry Cullen · Post by **Gerry Cullen** » Sun Jun 10, 2007 12:51 pm

Hi Chris, don,t mean to be a killjoy but we bought our villa 5/6 yrs ago and for the first 2/3 yrs got 8/10 wks rental, It didn,t cover the mortage but it did help with the expenses. The last couple of yrs 3/5 yrs rental and this yr 2 wks rental,in fairness we don,t push the rentals as hard as we could but we still use an agent.Sorry if this sounds a bit bleak but most of the successfull renters seem to live in portugal and use the villa as a buisness doing their own maintence etc. thus cutting down on expenses.Renting from afar can be a far less profitable affair.Anyway best of luck no matter what you decide and remember youll always get a huge amount of help from the good folk on this site.