Woolwich BTL mortgage question

THRIFTY_GIRL

I am looking at the woolwich BTL mortgages. The problem is the property is in my name only (ie not including my husband). My income consists of rent, child benefit and tax credits. My husband pays for household costs except the buy to let mortgage.

Will the Woolwich £20k income rule be strictly applied? (LTV will be 50% or less so no problem, and rental income approx 3x monthly interest. Note, household income is in excess of £20k accounting dh salary alone and my residential mortgage is Woolwich - might this help?

dlspttr

The best bet would be to speak to a mortgage advisor - there is a possibility that they could consider the additional income depending upon a variety of other factors. Barclays actually maintain a pre-approved limit for many customers based on their account history, credit rating etc. If the loan you're after is within their system's credit limit, the process is very smooth with minimal documentation.

Meeper

The pre-approved limit only applies to residential borrowing.

Yes, the £20k income rule is strictly applied with Woolwich.

Is it a property that you already own, or you are buying? If buying, why not do it jointly? If re-mortgaging, you could do a transfer of equity into joint names.

If you want a lender who looks SOLELY at the rental income and doesn't care about your personal income levels, you'll be wanting The Mortgage Works, part of Nationwide, and available for applications through registered intermediaries.

THRIFTY_GIRL

Thanks for the reply Meeper. We are in the process of buying; we were hoping to have it in my sole name for tax reasons (DH is a taxpayer, I am not so saving on the tax paid on rental profits). I like the look of the Woolwich as it is a lifetime tracker; the high fees make alot of the others seem not worth having. I think I might chance it with the mortgage advisor in branch and see how that goes, otherwise will have to look elsewhere.....

Do you know by any chance what my chances might be with Northern Rock as that has also appeared on the best buy tables.

Thanks for pointing out who TMW are...I did wonder.

Leon_W

Northern Rock have a £25k minimum income (verified in every case).

To be honest, if you have income issues, you are wasting your time looking at best buy tables as practically all lenders have a minimum income threshold.

Speak to a broker but there are not that many options for you unless you add your husband.

Edited to add. Even if the house is in joint names, if the rent is paid to you I can 't see that your husband would be liable for tax anyway. Check with an accountant though and not my say so !

THRIFTY_GIRL

Thanks. It looks like we can have it in joint names then we need to make a declaration for tax to specify our shares. Will do this so we can go for the Woolwich option I think!

Meeper

I was about to suggest this.

When you make the purchase, make sure your conveyancing solicitor does it on a tenants in common basis with unequal shares. You can then be the effective owner of 90% of the property (thus the rent) and the hubby can be the owner of 10%. He will only pay a small amount of tax on the rent, but his details can be taken into account on the mortgage application. Do note however that if he is on the mortgage you are jointly and severally liable for the full amount. What this means is that although your hubby only owns 10% of the property, he is liable for 100% of the mortgage in the event of default.

Just something to be aware of.