getting a mortgage

suzannex

Hi,
I'd be most grateful if anyone could help me with the following.
I am just about to take the plunge and go for purchasing a second property (we are intending to let out our existing home). My FA has advised me that I can get a mortgage of up to £175000 over 14 years (which takes me up to 65 years). I have a top credit score, steady employment, no dependants. This would make my monthly payments around £1400 per month. I am confident that I can afford this as I take home around £3000 per months-but how would lenders view this? I am due to retire at 66 but will have a private pension of around £25,000 plus lump sum of around £30K plus a second property which will be paid for (current value £150,000) would a lender be likely to extend my borrowing into retirement if they deemed the £1400 payment beyond their affordability criteria? I am very pleased with my FA but now it is getting to the crunch point I am trying to cover all eventualities!

ValHaller

A lot depends on the things you say nothing about. like the equity you have to put into the new property and the value of your current property and of course the equity in that. Plus you imply you have a partner, so there is also the information relating to the potential for that partner to bring you down financially - so if the current property is not owned outright, how do things stand?

holly_hobby

Under FSA responsible lending regs, the lender must ascertain that your income is approparite, and sufficient to support the borrowings throughout the chosen term - regardless of LTV or other assets held (such as your 2nd property).

Some lenders, such as Nationwide, will include a portion of rental income from an unencumbered (mge free) let property, in addition to any employed or acceptable retirement income.

The max redemption age with most lenders is 75 yrs (subject to affordabilty and status of course) - although HSBC only offer 65 yrs on an interest only mge, and there are a couple of lenders whom don't have a restrictive upper age limit.

If you chose to release equity from your let propety (say to redeem any or all of your residential borrowings), the upper age limit seen with residential lending isn't as strict (due to the commerical nature of the property) and you would meet min income requirements of 25k from what you say.

Hope this helps

Holly