Mortgage advise - applying for a second

Themandarin

Hello, I hope someone can help - I have been reading this forum for a while now for advice!

My partner and I are looking to buy a home for ourselves. I currently have a flat with £49,000 left to pay back and he has a flat, mortgage free. We would like to keep both flats and take on another, joint mortgage.

I am self employed with three years good accounts to my name. We are hoping to save a large deposit to buy the house - ideally 20% deposit. However, I am not sure whether I would be better off paying as much of the first mortgage off first and having a smaller deposit for the second mortgage or have the larger deposit for the second deposit.

I understand that being self employed makes it harder to get a mortgage. I got my last one when I was still employed. I know that we can AFFORD another mortgage, whether my flat is rented out or not, but it's convincing a lender that!

Hoping someone can shed some light on this for me and many thanks in advance!

kingstreet

Larger deposit for the new property is the best route.

Look for a lender which will ignore the mortgaged BTL in the background (it should raise a rental income of 125% of monthly mortgage interest, assuming a mortgage rate of 6%).

Your partner should also get the rent from his unencumbered property allowed as part of his mortgageable income for the purchase.

It's only more difficult to get a mortgage when self-employed if you have only limited proof of income.

Take an average of your last three years' net profit and add it to your partner's gross annual salary. Make a deduction of the annual value of any credit commitments which will be ongoing, other than the mortgage on the let property. Multiply the result by 4 and you have what should be available to you borrowing-wise.

Themandarin

Thank you very much for your reply. Will possibly enquire more closer to our application!