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Mortgage application first direct - does this sound right?
Mantrahalos
Posts: 7 Forumite
Hi all. Hope someone can help.
Had an agreement in principal arranged through first direct.
Figures as below
Purchase price £450k
Deposit (savings and sale of house after mortgage cleared) £200k
Mortgage amount £250k.
Not found a house yet but have been looking.
We are a couple with a joint income of £63k. Plus income from a rental property of about £12k a year. (Mortgage on this is 7.2k)
Called today to see if this loan can be increased to £275k (on a £500k property) and told we were at the maximum we could borrow.
Not taking the rental income into consideration their own mortgage website indicates we could borrow £252k. They said the mortgage on the Btl was a liability which I accept but they offer no 'credit' for the income this liability generates.
Does this sound about right to the mortgage experts on here?
Thanks.
Had an agreement in principal arranged through first direct.
Figures as below
Purchase price £450k
Deposit (savings and sale of house after mortgage cleared) £200k
Mortgage amount £250k.
Not found a house yet but have been looking.
We are a couple with a joint income of £63k. Plus income from a rental property of about £12k a year. (Mortgage on this is 7.2k)
Called today to see if this loan can be increased to £275k (on a £500k property) and told we were at the maximum we could borrow.
Not taking the rental income into consideration their own mortgage website indicates we could borrow £252k. They said the mortgage on the Btl was a liability which I accept but they offer no 'credit' for the income this liability generates.
Does this sound about right to the mortgage experts on here?
Thanks.
0
Comments
-
Yep. Best you can hope for is the let property and mortgage is ignored as "self-financing" in the background. TBH if you paid off the mortgage, some lenders would allow the income (or at least part of it) to increase your borrowing power, giving you around £310k.
If you were applying to one of the more generous lenders, you'd be offered more like £285k without the rental income anyway.
You have to decide if you really want a First Direct mortgage. If you do; their money, their rules...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.0 -
Without tenants then the let property becomes a liability. So HSBC will only allow income from rental property to be included where the property is mortgage free.
£252k is 4 times gross earnings. So that's the maximum available. Anything above is pushing the boundaries to a conservative lender such as HSBC.0
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