Mortgage risk when owning another property

acs_2

If I own another property, mortgage free with no debt what so ever against it, will I be considered less of a risk when applying for a mortgage to buy another property? The mortgage free property has a market value of around 140k, and wouldnt be used to borrow against - there would be a substantial diposit in place too.

thanks in advance as always.

holly_hobby

Sorry, ownership of an unencumbered let property will have no baring re your mortgage application on another property (notwithstanding any rental income that you wish to be included in your new mge application).

Hope this helps

Holly x

acs_2

holly_hobby wrote: »

Sorry, ownership of an unencumbered let property will have no baring re your mortgage application on another property (notwithstanding any rental income that you wish to be included in your new mge application).

Hope this helps

Holly x

Thanks. Just to clarify, the other property isn't let as such - a relative lives in it and takes care of all the household bills.

If a mortgage lender doesn't take assets into account when considering an applicants risk, what do they take into account apart from employment, wages and deposit?

holly_hobby

Sorry I assumed it was let.

Setting that aside you ask what will be assessed as part of your mortgage application ....

The lender will initially perform a credit search, which will reveal any adverse income and evaluate whats referred to as "payment profile" data, which is essentially how well you manage (or have managed) any commitments and financial arrangements over the proceeding 6 yrs to application.

If you have been the subject of a bankruptcy or repossession order, this must be disclosed if requested, and no matter how many yrs ago it was.

Alongside this they will verify your employment status and assess your income and existing commitments as part of their affordability assessment.

They will ask if you have any interest in another property - this is primarily with regards to any exisiting mortgage commitment that won't be redeemed upon completion of the current purchase you are making.

And finally, how much deposit you have and its source ie has it been saved by you, is it a gift from parents/close relative, etc

Hope this helps

Holly x

acs_2

holly_hobby wrote: »

Sorry I assumed it was let.

Setting that aside you ask what will be assessed as part of your mortgage application ....

The lender will initially perform a credit search, which will reveal any adverse income and evaluate whats referred to as "payment profile" data, which is essentially how well you manage (or have managed) any commitments and financial arrangements over the proceeding 6 yrs to application.

If you have been the subject of a bankruptcy or repossession order, this must be disclosed if requested, and no matter how many yrs ago it was.

Alongside this they will verify your employment status and assess your income and existing commitments as part of their affordability assessment.

They will ask if you have any interest in another property - this is primarily with regards to any exisiting mortgage commitment that won't be redeemed upon completion of the current purchase you are making.

And finally, how much deposit you have and its source ie has it been saved by you, is it a gift from parents/close relative, etc

Hope this helps

Holly x

Thanks. You seem to know your onions... So, I wonder if you could give me a brief overview of how levels of borrowing are worked out?

Example.... is it 4 x my income and my partners income? is it dependent on deposit...etc