Another mortgage

Phil_rich

Evening all,

Ok, I need to know if I would be able to get a second mortgage. My details are as follows;

Earnings £35k plus £10k freelance
Mrs is now housewife so no income

1st mortgage is a joint with my mrs 50/50 its £748 per month but the house is let on a long term let and brings in £575per month, so we top up the difference.

We currently rent for £800per month but are looking to buy a £180k house. We can put down £60k so I would need a single mortgage of £120k (66%ltv). Would I qualify bearing in mind my current mortgage?If so what sort of rates are we looking at for a 3 - 5 year fixed?

Thanks

Phil

kingstreet

You need a good whole of market broker for this.

You need a lender who'll ignore the BTL in the background.

Many lenders will assume you have no tenant and will want to remove the BTL mortgage amount from your borrowing power, or others may remove the annual cost of the mortgage from your income.

£120k on an income of £35k (ignoring the freelance bit unless necessary) should be ok, but you'll struggle with a lender who'll take £750 a month out of your income first.

Are you really subsidising the other property to the tune of £173 per month? Are you paying interest-only for that mortgage as well?

Phil_rich

Hi,

yes i currently subsidise the other mortgage, its a repayment mortgage.

Can you recommend a lender who would ignore the first one? Also as the first mortgage is a 50/50 with my mrs and the new one would be me only would i not be able to claim that I am only liable for half of the £750? Would that help?

Phil

kingstreet

Phil_rich wrote: »

Hi,

yes i currently subsidise the other mortgage, its a repayment mortgage.

Can you recommend a lender who would ignore the first one? Also as the first mortgage is a 50/50 with my mrs and the new one would be me only would i not be able to claim that I am only liable for half of the £750? Would that help?

Phil

If you intend to be a long-term landlord, it may be worth thinking about switching to interest-only. Only mortgage interest payments, along with other expenses, but not repayments of capital, can be offset against the rental income for tax purposes.

I wouldn't guess at who might be the best lender for your individual circumstances. Hence my suggestion that your best port of call might be a whole of market broker.

There's no such thing as a 50/50 mortgage. You are jointly and severally liable for the whole debt, so the whole payment could be deducted from your sole income/borrowing power.