How do I work out what we can borrow?

Skint_Catt

My darling boyf and I are thinking of buying together before the end of the year hoefully!

But how do we work out what we can borrow?

Mine is simple enough - I earn a flat wage, but boyf has already got a house (an investment) which he rents out. However, the rental £ doesn't equal out the mortgage payments - there is a shortfall of about £200pm.

Would a bank calculate on X x mine plus his affordability? He earns good wage and can afford a fair amount, but would be stretched if it was 3 x salary (for example)

Thanks

Catt xx

Mr_helpful

Many lenders will ignore the BTL others will just take the shortfall off his income . Its not much of an investment if its costing him 22 pm or is the mortgage on a repayment as the lenders will use interest only figures.
So lenders vary but usually add the 2 salaries together subtract annual commitments ie 200 X 12 = 2400 and the figure they are left with will apply to the income multiple. Depending on a variety of factors they will then multiply by anything between about 3.5 and 5X joint salary. I usually work on 4-4.5 X joint sal.
Having said all this its probably easier to consult a fees free independent broker, there are plenty on this forum

Skint_Catt

Many thanks for your reply - it's an investment in that he bought it cheap from his father and it's already worth £125,000 more than he paid for it just over three years ago. I keep on at him to put the cheap rent up a bit in line with other houses in the area but he never seems to get round to it!

Thanks again,

Catt xx