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Do banks take (potential) income from rent into account when lending?
Kua
Posts: 303 Forumite
Hi,
I earn £17k and I suspect I would be able to get a pitifully small mortgage. Its a pipe dream but I would like to buy the house I'm currently renting a room in which I suspect will go on the market for £130/140k. Its a three bedroom house and I plan to rent out two rooms. Would the banks take this into account?
Thanks!
I earn £17k and I suspect I would be able to get a pitifully small mortgage. Its a pipe dream but I would like to buy the house I'm currently renting a room in which I suspect will go on the market for £130/140k. Its a three bedroom house and I plan to rent out two rooms. Would the banks take this into account?
Thanks!
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Comments
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No. You do not actually earn it yet. They don't take possible income into account, only what you can prove.
Someone posted on here a few days ago that they got lodger rent taken into account as they could prove it for a couple of years.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 -
How did he prove it? Can you link?kingstreet wrote: »No. You do not actually earn it yet. They don't take possible income into account, only what you can prove.
Someone posted on here a few days ago that they got lodger rent taken into account as they could prove it for a couple of years.0 -
Presumably by producing banks statements showing these deposits over a couple of years.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
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Bank statements showing it going in, SA302s (Self assessment forms) showing he has declared the income - those are the normal ways.
As has been said, lenders wont take future income into account. You mgiht get away with a Buy to let mortgage, but not if your living in the property - even then you would have to prove income. Its very difficult to get a btl mortgage if your not a homeowner.I am a Mortgage AdviserYou 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.0 -
Would it be fair to say I have no hope of getting lent enough? I can only stick up £10,000 (perhaps slightly more) for the deposit.
An offset mortgage, might be my only shot. But would my parents have to lock away enough cash to cover the shortfall? It seems to me the banks are only going to lend about £60k. With my deposit I'll still be around £70k short :P Is that how much they would have to link to my mortgage?
Not exactly sure how Family Offset Mortgages work/0 -
Keep building that deposit to keep the dream alive.0
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