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Can rental income be counted in mortgage calc?
Cerdin
Posts: 1 Newbie
Hi there
I currently live in a mortgaged house where I have a lodger who pays me rent. I'm considering buying another house for me to live in and will leave my tenant here to rent this house. My mortgage adviser has told me that the current mortgage will be excluded when calculating how much I can borrow on another house. He's also said that I can get a mortgage for 4.25x my salary. But what I didn't ask is....can the rental income be used to borrow more on the new house? i.e, is it classed as income for mortgage purposes?
Thanks
I currently live in a mortgaged house where I have a lodger who pays me rent. I'm considering buying another house for me to live in and will leave my tenant here to rent this house. My mortgage adviser has told me that the current mortgage will be excluded when calculating how much I can borrow on another house. He's also said that I can get a mortgage for 4.25x my salary. But what I didn't ask is....can the rental income be used to borrow more on the new house? i.e, is it classed as income for mortgage purposes?
Thanks
0
Comments
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A lender MAY exclude a let "in the background". If it does so, it will ignore the mortgage payments and the rental income.
Some lenders will ignore the income and "charge" you for the mortgage as you would have to pay that, and your new mortgage if you have no tenant.
The only way you'll get the rental income taken into account for your new borrowing is if there's no mortgage on the let property.
In short, the answer is unfortunately, no.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
OP has your mortgage adviser also told you that if your current property is held on a residential mortgage ( and is to remain subject to it) then you will need the lender's formal consent before renting it out? Many Lenders charge a one off fee and/or an increase in rate.
Are you fully au fait with all of your potential liabilities as a LL? If not search on here for G_Ms post on guidance for newbie LLs.0 -
Here is the post tbs si referring to:
http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=120 -
Have you calculated what your rental profit after tax would be ?0
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