assessing the amount of lending i can get on a BTL

de1amo

i have a flat worth about 175k/170k and rents for 775 ish--i am looking to see how much i could possibly raise on a BTL--i had an İFA say i would comfortably get 95k but i am wondering how high i could go???-i own the home i live in outright and have a small income in the uk---my income and life is abroad!!

Thrugelmir

• If the property rents for £775 a month.
• The lender requires rent to be 125% of rental income
• The lender bases their calculation on a 7% interest rate

Then you could be offered around a £100k by a lender.

de1amo

its the pc rate that they use that confused me--its a fixed rate i presume despite rates in reality being lower than that--i looked at the ipswich and it was offering about 4,57 for 2 years fixed- i have to be in the uk to deal with them because the İfas have to come from the area near İpswich!-someone suggested it!
why has the ifa asked for my income in the uk details?

Thrugelmir

Some lenders use a conservative rate of interest not the rate on the actual product . As this is commercial not consumer lending.

dimbo61

UK lenders want you to have a UK income of £20K at least if you want a BTL mortgage so you can cover the mortgage during void periods

Thrugelmir

dimbo61 wrote: »

UK lenders want you to have a UK income of £20K at least if you want a BTL mortgage so you can cover the mortgage during void periods

Not all have a minimum income requirement.

de1amo

but a true BTL is not assessed on income-its a commercial loan and based on rents. i have seen lenders who stipulate income as a condition but it seems to defeat the premise of mixing--i have a lot of income abroad but none of it can be used in the uk.--i dont touch my uk income which more than adequately covers about 100k lending and outgoings without the rental!

dimbo61

OK some UK lenders want you to have an income in the UK

de1amo

i just wonder if their are lenders who take into account income as well as rental--why the ifa is asking me?? be good if i could get a lower rate on my income multiples!!!--in my dreams!!

Thrugelmir

de1amo wrote: »

i just wonder if their are lenders who take into account income as well as rental

Majority of lenders as D61 says do have minimum income levels just to meet the criteria for application. So without the income your options are severely restricted.

de1amo

when you say severely restricted are the lender remaining (in your experience) particularly punative with interest rates?--this cash i am looking to raise is to just dump in gold and 9pc savings accounts --i can get permission to let from my current lendor to get it rented out--the money i want to raise is a punt.