Able to have 2 residential mortgages?

gwernybwch

I’m in the situation where I have a house with a residential mortgage with NRAM and have just signed a tenancy agreement to rent it out from the 1st July onwards (and have just submitted my ‘consent to let’ application to NRAM).

I can just about scrape together a 25% deposit to buy a second house – so the question – able I able to have 2 residential mortgages?

If I’m not able to have two mortgages and have to have one residential and one buy-to-let, it seems a chicken & egg situation – will anyone give me a BTL mortgage if that is the only house that I have?
On the other hand, will anyone give me a residential mortgage on a second house prior to me converting my original residential mortgage to a buy-to-let?

Thanks in advance for any replies.

Wh05apk

Provided your income is sufficient you should be fine, lenders treat your existing rented property differently, but generally provided the rent covers the mortgage payments (usually with some excess) they will disregard it.

gwernybwch

Wh05apk wrote: »

Provided your income is sufficient you should be fine, lenders treat your existing rented property differently, but generally provided the rent covers the mortgage payments (usually with some excess) they will disregard it.

Thanks for the reply.
Where you say "income is sufficient", do you mean that the income from my job is sufficient to cover the residential mortgage only OR the income from my job is sufficient to cover the mortgage on the residential property and the rented property?

One other query, I'm projected to make a profit from renting out the house, would this be deemed as 'income' when I apply for my second mortgage?

Brallaqueen

gwernybwch wrote: »

Thanks for the reply.
Where you say "income is sufficient", do you mean that the income from my job is sufficient to cover the residential mortgage only OR the income from my job is sufficient to cover the mortgage on the residential property and the rented property?

One other query, I'm projected to make a profit from renting out the house, would this be deemed as 'income' when I apply for my second mortgage?

Bumping because I would also like to know

dimbo61

Lenders like to see that the rent from the rental property is covering the Interest only mortgage plus 25%
By that I mean that if the mortgage is £400 a month you need to get £500 a month in rent.
Now if you get "consent to let" then other lenders will ignore that mortgage when you apply for your second mortgage.

Old_No.7

I have two residential mortgages. One is on a flat I bought with a friend years ago, which we now let (with a consent to let) and one on the house we live in, which I bought with my husband 5 years ago. So yes, it's possible. I did have to fill in extra paperwork about the property we let for our home mortgage, but that was all: our salaries were adequate to cover the new mortgage, so the bank (using 2 different ones) was happy with that.

gwernybwch

dimbo61 wrote: »

Now if you get "consent to let" then other lenders will ignore that mortgage when you apply for your second mortgage.

I spoke to Yorkshire BS and they told me something different – in so much they wouldn’t ‘ignore’ my first mortgage, but similar to Old No.7 they would require further details regarding the first residential mortgage before accepting the application for a second mortgage.

Old_No.7 wrote: »

I have two residential mortgages. One is on a flat I bought with a friend years ago, which we now let (with a consent to let) and one on the house we live in, which I bought with my husband 5 years ago. So yes, it's possible. I did have to fill in extra paperwork about the property we let for our home mortgage, but that was all: our salaries were adequate to cover the new mortgage, so the bank (using 2 different ones) was happy with that.

Thanks for the reply.
In taking out the mortgage on the house, did they include the 'profit' made from the flat as income?

kingstreet

My applicant was party to a mortgage with three of his friends and the property was in negative equity. He wanted to buy with his partner.

We had a 20% deposit and approached Nottingham Building Society who agreed to take the payments for the current mortgage off the applicant's income like a credit agreement, so they assumed he might be responsible for the full payment if his friends defaulted. The residual income was sufficient to provide good affordability for the new mortgage, so the case proceeded without further problem.

They will assume you have to pay the whole mortgage and get no rental income from the old one, in establishing affordability for the new one.

GMS

Any excess on the rental would not be treated as income by most lenders.

Provided the rent covers the mortgage plus 25% as a minimum then the first mortgage would be generally not treated as a commitment meaning your whole income could be used for the new mortgage (less any other credit commitments)

The new lender will most likely want to see the consent to let on the first mortgage before agreeing an offer.

dimbo61

YBS dont do BTL so would be very carefull with anyone who already have a BTL/ Consent to let property which is why YBS is a well run building society!

gwernybwch

dimbo61 wrote: »

YBS dont do BTL so would be very carefull with anyone who already have a BTL/ Consent to let property which is why YBS is a well run building society!

Thanks for the info. When I spoke to the YBS customer adviser she didn't to make too much of an issue of having two mortgages - providing that I met the usual criteria. But I guessing that speaking to a customer adviser and getting a mortgage application accepted are two very different things!