Let to Buy Mortgage

jamesyxx

Hi,

I'm looking for advice on the difficulties of obtaining a let to buy mortgage. The scenario is as follows:

My partner and I purchased a property in 2007 for £115,000. It has decreased in value significantly so we currently hold no equity in the property. We would like to rent this property out and have a tenant already lined up who is willing to pay rent @ 525pcm. Our mortgage is currently costing us £400pcm. We are in the process of obtaining permission to let from out current mortgage provider.

We want to keep our existing residenial mortgage and get a new mortgage for a property currently valued @ £90,000. Our combined income is approx £52,000 and we have available £10,000 as a deposit. With the exception of expenditure on our current property, we have one other loan for which we pay £220pcm. Our Experian credit score is Excellent and in the high 900's.

How likely are we to be accepted by mortgage providers given these circumstances? Don't want failed applications on our history.

Thanks in anticipation of your help!

Nat:j

Fire_Fox

The lender will want to be assured that you can afford both mortgages and the loan, should you end up with a vacancy or a non-paying tenant. Have you factored income tax into your calculations? What will you do if you fall pregnant unexpectedly, get made redundant or one of you has a long term illness or injury?

I would expect that one property with no equity and another with just £10K will be too risky for the lenders to want to bother with. These days lenders tend to take your deposit and subtract the amount of any loans or credit cards to find the real value of your deposit. Do you have money set aside for the costs associated with letting and purchasing?