retired teacher

retired_teacher_2

I am moving abroad (European community) and letting my house here - the rental income is roughly 3x the current mortgage per month

If I return in say 5 years time and want to get a mortgage to buy a property but do not want to sell my current home here but would continue to rent it out for income.
Will I be able to use the house as collateral to add to what I can afford outright? The payments would come out of the income for my present home. I also own outright the property I am moving to

Thank you

kingstreet

Are you asking about collateral, as in security, or are you talking about the rental income being added to your other income to increase your borrowing power?

If it's the collateral security issue, until about ten years ago, there was one lender at least which would take a charge over both properties. Now, I'm pretty sure you'd need two separate transactions, ie remortgage property one to raise a deposit for property two, then raise a mortgage on property two so you can complete the purchase.

If it's the income question, I'm pretty sure most lenders will not take it into account as you cannot guarantee to always have a tenant. In fact, they may ignore the income and penalise you the cost of the mortgage on the rental. Some do, some don't.

I'm not sure what you mean at the end when you say "I also own outright the property I'm moving to" as you say you're moving overseas. Is the overseas property owned outright? If so, that's not going to be taken into consideration either way.

retired_teacher_2

Thank you.

Yes I did mean that I own the property overseas outright - seems as if there is no alternative but to sell either the property abroad or the one here if I come back as the property here is too big for me to live in.
Seems strange that they would not take the rental income into consideration as it is treated like a business and other self employed/businesses cannot guarantee the income every month is going to be the same.