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Buying Outright to Let for Mortgage

cstarq
cstarq Posts: 5 Forumite
in House buying, renting & selling
Hi there im looking to buy an apartment outright in Central London in the docklands area worth anything from 1million to 1.5 million.

Could anyone tell me if i will be able to get a mortgage on another apartment with the same value and renting my outright place to cover the payments, will the banks consider or would i still need to show a regular income on top of this, given the price of the place im taking about.

Also what are the associated risks etc..

Comments

  • david29dpo
    david29dpo Posts: 3,986 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    Back from school already?
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    On a BTL mortgage you will need to show 125% rental against mortgage repayments + 25% deposit.

    On a domestic mortgage you will need to show salary (not rental - too unreliable)) income.

    Speak to an IMB/IFA.
  • cstarq
    cstarq Posts: 5 Forumite
    G_M wrote: »
    On a BTL mortgage you will need to show 125% rental against mortgage repayments + 25% deposit.

    On a domestic mortgage you will need to show salary (not rental - too unreliable)) income.

    Speak to an IMB/IFA.

    couldnt i just tie my outright property onto the domestic mortgage? then the lenders would be almost completely de-risked if anything should happen with my payments?
  • cstarq
    cstarq Posts: 5 Forumite
    david29dpo wrote: »
    Back from school already?

    no school was never for me i left 7 years ago, never looked back. now im trading equities for a living.

    you back from work already?
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    cstarq wrote: »
    couldnt i just tie my outright property onto the domestic mortgage? then the lenders would be almost completely de-risked if anything should happen with my payments?
    I don't understand.

    Either you buy outright (and do whatever you want - live there, let it, leave it empty)

    Or you buy with a domestic mortgage (and live there).

    Or you buy with a BTL mortgage (and let it).
  • cstarq
    cstarq Posts: 5 Forumite
    G_M wrote: »
    I don't understand.

    Either you buy outright (and do whatever you want - live there, let it, leave it empty)

    Or you buy with a domestic mortgage (and live there).

    Or you buy with a BTL mortgage (and let it).

    sorry if i confused you. i want to buy a property outright to let, and buy another property on domestic mortgage to live in with simliar value.
  • cstarq
    cstarq Posts: 5 Forumite
    cstarq wrote: »
    sorry if i confused you. i want to buy a property outright to let, and buy another property on domestic mortgage to live in with simliar value.

    but what im trying to say is i dont work thats why im saying will the banks still give me the mortgage on the second property considering i will have owned a place of same value outright.
  • kingstreet
    kingstreet Posts: 39,445 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    The rental income from the property you own mortgage-free will be allowable as income qualifying for your residential mortgage, however different lenders will treat this income in different ways and may not allow 100% of it.

    One major lender, for example, will only take 60% of it into account.

    The 2.28 post explaining the OP has no work came while I was typing. Superfluous text removed.
    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.
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