Money Matters - 3 ways to easily acquire a mortgage

By Shelley Mackay

Jun 11

Many people say to me, "I'd love to be a property investor, but it's kind of hard." And I'd say, "Why is it hard?" And they'll say, "Well, I can't get a mortgage." Hmm, okay, and when I kind of dig a little bit deeper, it's not they can't get a mortgage. The actual truth is, they've assumed they can't get a mortgage. So I want to give you a few examples of how you could get a mortgage and how easy that is.

So let's start with a young person. Let's start with a young person that's maybe decided they're going to further their education by going to University. And they're going to come out with a £50,000 student debt, aren't they? Well, let's personalize this. Let's talk about my own 18 year old daughter, Lydia, she's just done to University. Now, most people, most students, most parents will assume that 18 year olds can't get a mortgage, they're going to get saddled with student debt and probably, when they come out in three, four years time, they're going to owe £50,000, that's the kind of normal safe assumptions.

Did you know you can get 100% student loan? Did you know the student therefore doesn't need a deposit? Did you know that you, the parent, me the parent, can act as a guarantor for 100% of the student loan? Now where Lydia's going, she can get a 3 bedroom flat for £60,000. Okay, it’s the west of Scotland, I know it won't be the same price everywhere, but many parts of the UK, they still will be, Northeast, Northwest, just same, Wales.

She's already done a year in halls because in Scotland, they do a four year degree, not three year degree. Start at 17 and whatever, so it's slightly different. So she's just paid for £496 a month as a residence, for a year. That's what her friends expect to do and all her friends are now moving out to pay for £496 a month sharing flats and doing whatever else.

So Lydia is currently shopping for a flat. She's going to get a three bedroom flat and she's going to put two of her friends in the other two rooms. And her mortgage, the mortgage rate, is going to be right around 3%. So 3% on £60,000, I'll do the math for you, don't worry, don't panic, is £1800 a year, divide by 12 is £150 a month. So she can get a three bedroom flat for £150 a month as a landlord. She lets out the other two rooms and brings in £1000, she just made a profit of 850 quid a month. Student debt, I don't think so.

I think the reason people get into student debt is because they don't know how not to. They get very educated on engineering or French or something but they're not getting very educated on money. So young person can't get a mortgage, nonsense. I got my first mortgage when I was 18 so I know it's nonsense. Jack, my oldest son, got his first mortgage when he was 18, it's nonsense. Young people can't get mortgages, nonsense. Young people think they can't get mortgages.

Let’s now go to the other end of the spectrum, I can't get a mortgage because I'm too old. Okay, so young people can't get mortgages, old people can't get mortgages. Is there actually anybody that can get a mortgage? Yes, everyone. I've been told that I can't get a mortgage because I'm 75. No, you can't get a mortgage, but a company can. You can form a limited company and you can own the limited company. All of us at some point, none of us is going to live forever, limited company will. So if you know the right question to ask, go to an IFA, "I'm 78, can I get a mortgage?" "No." "I'm 78, I've got a limited company, can a limited company get a mortgage?" "Yes."

The quality of your life will be determined by the quality of the questions that you ask. And if you want a better quality of life, learn to ask a better quality of question. So instead of, "I can't get a mortgage." The question that should be asked is, "What do I need to do to get a mortgage?" Okay, now let’s look at, I want to get a mortgage but I want to get by to live. What kind of percentage deposit do I need? Everybody thinks it's 25%. Is it? Go and Google it. Google buy to let mortgage rates. Googles your friend. For example, there's a whole range of mortgages where you only need a 20% deposit. I could rattle off the names, I'm not going to because depends on when you're watching this, they'll all have changed and whatever. There's a whole range of mortgages 85%.

There's many ways in which you can get a mortgage, as a person, as a limited company, as an LLP. The thing you need, the thing you need, is a good mortgage broker, a really good mortgage broker. And a mortgage broker that understands both buy to let mortgages and commercial finance. "Oh no, commercial finance Paul, I don't even have a buy to let, I can't get commercial finance." I know what you're thinking.

But let's have a look at commercial mortgages. "I can't get a commercial mortgage because I've never had one before because I don't have the experience." Now if that was true, no one would ever get a commercial mortgage because here's the news, for everybody, the first time is the first time. And if you can't get a mortgage because you've got no experience because it's the first time, no one would ever get one. So the entire commercial mortgage industry would go, there wouldn't be one. So I would like to give you the knowledge, the confidence and the power to take action that you can get a mortgage. You absolutely can.

"I've got bad credit." Yes, we've all got something haven't we? So how about you do a limited company and how about you include people in that limited company that have got good credit or an LLP. I promise you, there is a solution to every problem. The mindset it the thing that is stopping you getting the mortgage. So if you want a mortgage, fix your mind.

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