Additional borrowing

stphnstevey

Hi,

We bought are 1st property 2 yrs ago, which we bought on a residential mortgage and now rent out. Nationwide (are lender) said we were ok renting it out with no change to the mortgage. Effectively keeping the benificial residential interest rates and no further deposit needed. We will also gain on CGT as it was our prime residence through the 2 yrs.

We bought another house 2 months ago on another residential mortgage, but due to my work, we are looking to move again. Again, I would like to rent out the second house and buy a third. I would like to keep the same mortgage.

I am a little worried I might be classed as a property trader for income tax purposes - any thoughts?

Our income is enough to afford a normal mortgage, but not anything spectaculer. Does anyone know of lenders that would take into account the rental of the first two mortgages?

Barney088

Just to clarify, are you looking to use the rental income for the two properties to "top up" your current income?

Many lenders will "ignore" the debt if you can evidence the property is rented out, as such you will be treated as normal, you earn £10K, you can borrow £30K.

If both properties have only been rented out for a few months, most lenders will not allow you to use the "profit" from these to pay your new mortgage, but each case on it's own merit. It depends on deposit, "earned income", loan size etc.

stphnstevey

Hi

Thanks for your reply.

We should be ok if we are judged purely on our combined income and wouldn't normally need the rental to 'add' to our income to afford the mortgage we want.

I just wanted them to disregard the 1st two mortgages as the rent more than pays for them. However, as you mentioned, because they have been rented out only a few months, I don't know if they would.