Q:My 100% fixed rate mortgage is coming to an end soon, and I'm obviously going to be hit hard. While the loan to value rate is now about 110%, I could possibly get an affordable deal due to my salary.
However, my annual salary is about one sixth of the debt I owe. Yet if I include rental income from my two tenants, that drops to less than one fifth. So can I include it, or at least would it be considered as an acceptable form of other bonuses / income for the mortgage lender to consider?
I remember being told a couple of years ago that it's not normally acceptable to include it, but I dont know if that's right.
You either have to look at each property separately, or bung all the assets (properties) with all the debts and look at the whole picture i.e. all your income against all your borrowings and other outgoings.
I don't hold out much hope, though – sorry
I'm not sure who told you that, but I'm not aware of any lender lending over 97% LTV at present. If you are looking at self cert, you'll need at least 20% equity. You can earn as much as you like, but where a loan is secured on a property, no one is going to lend you more than the value of that property in the current climate.
also, my actual situation is slightly more complicated than would seem in the original post, as i didnt want to bore anyone. It involves a second property and expensive work that will boost value required to the other one, which makes it in some cases easier and in some cases more difficult to borrow the money, so it's not as simple as just remortgaging on 110% ltv
The bit you describe as 'slightly more complicated' which you think is boring is the most relevant bit of your situation. No bank will give a mortgage unless their client has assets worth comfortably more than the mortgage loan. Only after they are happy about that will they consider your salary. So you are going to have to write the boring details if you want a more informed view.
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sorry albo but your main issue here is loan to value….if it's over 95% you have no chance i'm afraid regardless of your income.
would love to be more positive.
I'm not sure but I think mortgage companies normally ask if anyone else will be resident in the property and your relationship to them.
that's true, but I've been told that there are lenders who'll let you remortgage provided you have a good credit rating and havent missed any payments, as I do, and provided your income levels are to their satisfaction
also, my actual situation is slightly more complicated than would seem in the original post, as i didnt want to bore anyone. It involves a second property and expensive work that will boost value required to the other one, which makes it in some cases easier and in some cases more difficult to borrow the money, so it's not as simple as just remortgaging on 110% ltv
Yes I would guess so, maybe ask you FA to look into this question with the provider before saying anything??
Wish you luck
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I don't think it is acceptable to include it and also, does your building society know you are letting out a couple of rooms, I may be wrong, but you may actually need their permission to do this?
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