Let To Buy - what is considered?

lowis

If I wanted a Let To Buy mortgage, what income/variables etc are considered?

Do they take into consideration any of the potential profit from the Let To Buy property, or would the lender only look at my salary?

Basically how do LTB mortgages work?

Thanks,
L

herbiesjp

I think you need to explain what you are doing as many people get LTB and BTL mixed up.

Do you have a property that you live in and want to let out?

lowis

hi, yes, i live in a flat which i could rent out for around £1100 a month, the mortgage and service charges are £480 per month. hence i am wondering if any income from this property would be used in any calculation towards the mortgage for a second property. and i "have" about 110k equity in the property as well.

i just have no idea how these mortgages work. and i guess there are a load of tax implications too so would definitely see a broker/ifa for advice if i did this. just hoping someone knows the bare-bones of things here.

herbiesjp

Definitely see a whole of market mortgage adviser

No - the income you get from that flat would go towards "ignoring" that credit commitment.

So the lender you would be looking at for the new purchase would ignore that existing mortgage, but would not take any of that rental income into account

Don't forget to get consent to let from your current lender - if they do not agree this you will need to get a BTL mortgage on that property first.

Also what is the value of the mortgage and the property - as this will dictate if this is a viable option

lowis

the property is probably worth around £200k (safe estimate)- an optimistic valuation would be £230k (based on similar in the area) and my current mortgage is £92k.

herbiesjp

Well that aspect of the scenario looks fine

You now need to make sure you can find a lender for the new purchase that would be happy with that propety in the background.

Next step is definitely speak to a whole of market adviser