Buy To Let Then Buy Another

dkb

Hi
I'm in the process of making decisions about a property currently on consent to let.

Say I had my rental property on buy to let owing 90000 and tenanted (is that a word, not sure ) and my salary is 27800 plus the rental income.

How do the lenders then view a second mortgage? Do they look at it as I already have 90000 of debt or so they look at it as its being covered by the rent?

I did a quick calculation on nationwide website saying I already owed 90000 on another property and the result said they'd lend 44000.

Does this sound right? I was thinking I'd be able to get another mortgage of around 90000 seeing as the rent covered the mortgage on the BTL.

Thrugelmir

And if there's no income. Property empty , tenant defaults, what then? You've a liability to meet. Not only the mortgage but all other costs.

kingstreet

Some lenders will ignore a let property in the background. None will take the rent into account as part of your income, unless the property is unencumbered - mortgage free.

This is what Nationwide criteria says about such cases;-

Clients with Additional Properties

Where your client will own more than one property on completion of their new loan with Nationwide the maximum LTV is 85%. Purchase applications for these clients should be keyed as a Second Property to ensure the correct LTV limit is applied.

For information about products please see our products, loan size and maximum LTV criteria.If your client owns more than one property, we require all addresses and mortgage details.

Let properties are treated as self-financing where the rent received is at least 125% of the current mortgage payments.
Where let properties are mortgage free a percentage of the total monthly rent received will be treated as income.
Rent must have been received for a minimum of one month at the point the application was submitted and we will require up to date bank statements to confirm this.

A copy of the signed tenancy agreement is required.

dkb

Thanks

I would have enough to cover the mortgage in the BTL if I had no tenants. Wouldn't be able to ever go out anywhere but I'd be able to pay the bills