Do all lenders view rental income as 'secondary'..?

Charlton_King

Further to a recent thread I posted, I have contacted Santander regarding the possibility of a remortgage with them.

They inform me that they regard the rental income we have from let properties as 'secondary' and are only willing to count 50% of it. For that reason, we fall short of the amount required.

Can anyone tell me whether or not this is an industry wide attitude?

kingstreet

Is the rental income unencumbered?

No mortgages on the let properties?

Charlton_King

kingstreet wrote: »

Is the rental income unencumbered?

No mortgages on the let properties?

No. Just the one mortgage against our 'principal private residence'.

TBH I was a bit surprised at the attitude on display. It was as if the 'adviser' had been told that the default position was not to lend under almost any circumstances...

kingstreet

Lenders tend to ignore the rental income and mortgage cost of a let property where it's self-financing.

Where there's no mortgage, rental income should be allowable, but the proportion allowed will very from lender to lender.

It may be worth speaking to a broker to get a wider view of the market, if you need more than the 50% mentioned.

Charlton_King

kingstreet wrote: »

Lenders tend to ignore the rental income and mortgage cost of a let property where it's self-financing.

Where there's no mortgage, rental income should be allowable, but the proportion allowed will very from lender to lender.

It may be worth speaking to a broker to get a wider view of the market, if you need more than the 50% mentioned.

So may I ask if you are aware of any specific ones which allow a higher proportion..?

Crashandburn

Also some lenders will only use the income from the let properties you have stated on your tax returns. If this has been low due to repairs/costs on the property, then you will find that not much of this income can be used.

I still think it may be a case of better the evil you know

Brighty

Try Nationwide, looks like they allow 75% of rental income.
Plug your numbers in here http://www.nationwide-intermediary.co.uk/calculators/aff_calc and see what it gives you.
I tried my numbers in there and it will lend me 5x salary, i added my rental income to my salary in the salary box and it was still 5x the higher figure, but when i put salary and rental income in the correct boxes if dropped slightly, which i worked out meant they only take 75% of rental income.

Brighty

Crashandburn

Brighty wrote: »

Try Nationwide, looks like they allow 75% of rental income.

'Rental income from a mortgage free property'

holly_hobby

Nationwide only consider (a portion) of rental income, if it is derived from a a mge free (unencumbered) property - as already stated. Of which you have confimred is the case, in post 3. (they do require sight of tenancy agreement & proof of income recd reqd). However, the possible fly in the ointment is that the max LTV is capped at 85%, as they treat and assess the resi mge application under 2nd property criteria.

How long has the property been let for ?

Do you both declare, and submit self assessment tax returns on the rental income ?

Hope this helps

Holly

Thrugelmir

Charlton_King wrote: »

So may I ask if you are aware of any specific ones which allow a higher proportion..?

Are the tenants committed to a long term agreement ?

Charlton_King

Thrugelmir wrote: »

Are the tenants committed to a long term agreement ?

Tenants are tenants. We have more than one property. The tenants always have the legal option of giving one month's notice.