Mortgages and rental income

Patmoore

Hi,

Are there any mortgage lenders that take potential rental income into consideration? I've been told by several people there are. I understand the obvious risk that I could never get a tennant, however, my parents have said they will pay the rental income until i got a someone in.

Anyone got any advice or info?

Ian_W

Hi pat,
Could you just clarify what you mean? Is this for a BTL mortgage, or for a normal residential mortgage? If it's the former lenders usually require that the expected rental is something like 130% of the mortgage payments.

Patmoore

I mean for a normal mortgage. Basically, will a lender take potential rental income into consideration when looking at affordability.

AndrewSmith

No, as it will not be a residential mortgage if you are letting it out. Unless you mean like a lodger etc, in which case normally no I'm afraid.

BTW Hi IanW

Andy

Patmoore

Yeah, well I'll be living in it and renting out the other room. Just that I know of people that have had rental income taken into account as they had their folks coughing out until someone came in to rent out the other room.

AndrewSmith

It really does depend on:

a) The lender
b) The amount of mortgage relative to the property value (Loan to Value %)
c) Your payment and credit history
d) If you are looking to remortgage or purchase etc:
e) What your income without taking the rent into account is relative to the mortgage

Andy

Patmoore

Cheers Andy, the info is very much appreciated. Off to several advisors this week, so just overloading on facts for the moment.

AndrewSmith

No worries glad to help. Come back for verification of what the advisors have told you.

Andy

Ian_W

Hi Andy,
Couldn't keep away then? Very adictive forums.

And my next advice was going to be:
Find a local mortgage broker who is "whole of market" [which we know is the whole of the market ] either thro https://www.unbiased.co.uk, or better still recommendation from family and friends, as they will be best placed to advise which lenders may allow you to count income from a lodger.

How did I do?

AndrewSmith

Ian W,

As always, spot on and very sound advice

Andy

MortgageMamma

Hi Andy

Lovely to see you again, my rage has now depleted but I'm still a bit irked on people getting free advice and leaving us advisors trying to do an honest job run ragged and out of pocket!