can i include my rental income in my salary

albo2002

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.

Nessa56

Hi

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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albo2002

i had no idea i had to let them know! But, as I'm switching provider, wouldnt the new one would know by default on account of me trying to include it in the income I'm generating?

Nessa56

albo2002 wrote: »

i had no idea i had to let them know! But, as I'm switching provider, wouldnt the new one would know by default on account of me trying to include it in the income I'm generating?

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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dreamalittle

Even with extra income, you won't find anyone willing to lend you 110% of the value.

albo2002

dreamalittle wrote: »

Even with extra income, you won't find anyone willing to lend you 110% of the value.

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

mlz1413

I remortgaged last year and needed 4 x my salary the new company would not do it as they don't lend that value, after talking to them they realised I was only re-mortgaging not borrowing any extra so they let it go through - so it maybe possible for you, but I will add my mortgage was less than 70% LTV and it was last year so I was generally in a better position.

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.

Rabiddog_2

You def have to tell them about any paying guests, whether perm or temporary. Also your insurance company will be delighted to hear about it.

happybroker

albo2002 wrote: »

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.

quote]

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.

Incisor

albo2002 wrote: »

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

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.

Microstar_2

110% sounds very very difficult, I'm sorry to say. Any lender will also need to be told about your room rental. Tell your insurance company (don't 'forget to tell them' - there could be VERY SERIOUS financial repercussions in the event of a claim). I suspect there could also be council tax implications if you currently live alone.