What will be taken into account on a mortgage application?

Honey*Bee_3

Bit of background: Currently I own a home in my name only. My partner lives with me and owns property that is currently rented out (with a mortgage of almost 100%).

I have been self employed for 3 years, and as a qualified accountant I am aware that there are products available for people in my profession.

Ideally, I would like to keep my current property and rent it out, then my partner and I get a joint mortgage on our first home together.

My query is, will the mortgages we have already restrict the amount we can borrow?

I am currently saving for a deposit, as is my partner and do have some equity in my current home.

If we can only borrow say £250k and already have £250k in our other properties, would that put the idea totally out of reach?

Hopefully, that is enough information for someone knowledgable to shed some light!

Thanks

kingstreet

Varies from lender to lender.

Some lenders will ignore a let property and mortgage in the background, subject to one or two issues.

Others will deduct the monthly cost of the mortgage from your income, as it would a loan repayment, as you may have to pay it when you have an untenanted period on top of the mortgage you are applying for.

Finally, one or two lenders will take the capital value off your borrowing power, leaving you only whatever is left for your purchase.

Final point. The loan to value of your new purchase is going to be important. A 75% mortgage is going to be a lot easier to square away the other properties than would a 90% application.

ACG

As kingstreet says, there are various ways lenders would look at it.

Its a case of finding one that would look at it in a way that benefits you.

Thrugelmir

How much exposure do you want to the property market and interest rates?