Is this possible or am I living in la la land!

Duckduckgoose

Hi in just wondering if anyone had any advise on my situation

I'm currently a stay at home mum but hope to ho back to work in the next couple of years

My partner earns about £15-17000 a year

I own one house worth £165000 and another flat that's worth £94000 both mortgage free thanks to an inheritance (the flat is rented I live in the other)

I'll get a combined income of £1300-£1400 p/m if I rented both properties out I also have income from investments worth about £500 a month
I also get £200 a month on tax credit/child benefit
so about £24000 a year income total plus my partners

I've seen a house come up for sale relatively cheap for the size /area for £195000 fixed price

I could prob afford a £35000 deposit but do you think the banks would offer me a mortgage for the other £160000 based on rental income rather than employment income ? I know their stricter these days

Basically do you all think I'm wasting my time and likely to embarrass myself getting declined by the banks?

Thanks

So potential income

Cazza

Would the new house be for you to live in? If so, is there any reason why you would not want the mortgage application to be done on a joint basis with your partner?

ACG

Ive never had anything like this personally so i cant give you a confident answer but presuming you pay tax on your rental income already, you can get some estimates from estate agents on rent that you wuld get on your property your living in then i would say you probably have a decent enough chance of getting a lender to agree a mortgage for you. Also presuming your child(ren) are under about 13 or so.

It might not be as easy or straight forward as a normal mortgage but i think there is a decent chance.

This is presuming its a joint app.

Duckduckgoose

No mortgage for this property would be in both names sorry if that wasn't clear!

Duckduckgoose

Why under 13 out of intrest does it make a difference?ACG , they are 1 and 7if it helps!

ACG

different lenders have different cut off points i think its around 14ish - but basically some will allow it for affordability purposes but if you can only just afford the property and then in 2 years its due to end - they have to look at that and wonder how you will be able to afford it in 2 years when that payment stops.

Duckduckgoose

Ah ok I see well the rent from this bousevwould comftably cover the mortgage on the other from my calculations just didn't want to make a fool of myself in the bank with a totally mad application!

Trying_to_be_good

I'm no expert, but have you looked at taking Buy-to-Let mortgages on the flat and your current house, to raise the capital (or a huge chunk of equity) to buy the new house?

Would your tax credits stay the same (and therefore in the affordability for a new residential mortgage) if you were receiving more rental income from renting your current home?

Do you want so many eggs in the 'residential property' basket? Would it be better to sell one of the other properties?

All just thoughts!

ACG

The last post, raises a good point. It would be more expensive but BTL mortgages on the other properties would be another route.

Personally for this, i would use an advisor. Its not a straight forward application i dont think so to save your credit file and time i would get an advisor speaking to the various lenders before any application is made.

If you speak to the branch they will tell you wht you want to hear in order to get an application in to go towards their target.

Duckduckgoose

I'd like to keep both properties really and it wouldn't really make a difference if tax credits changed as the rent from this house would be paying it off so I'd have the same amount as now really and it'd still be affordable in our current budget

Have looked at the buy to let but not v keen tbh

Dave_Ham

As stated, this will be easy but lender selection will be key..

Sort yourself a decent advisor and you will save a fair bit of money and a lot of time...

You are certainly not in la la land - well I do not think so....