Do lenders accept rental (and potential rental) income?

Beckyy

Thinking about the future and wondering if mortgage lenders accept rental income from BTL property which you own as part of your income.

We have a BTL, and ideally would like to purchase our next home then remortgage our current house with a BTL mortgage and let it out as a 2nd BTL.

Would lenders accept the rental income from our current BTL, and would they accept potential income from our current house/'to be BTL' if we could provide a rental valuation?

Do they only count a certain percentage? or income minus BTL mortgage costs etc.?

Just curious and thinking about future house budget, any replies appreciated!

kingstreet

You usually only get to include the income if the property is unencumbered. If there is a mortgage, the usual procedure is to treat it as "self-financing" and ignore the existing mortgage and rental income.

Funny_old_game

As above, therefore technically treating it as another income and following self employed criteria with declared income to HMRC confirmation. Most would require 3 years mortgage free before using the income.

Base your borrowing in no rental income at all if it's to be a mortgaged property.

Beckyy

Interesting, I was expecting them to accept income minus monthly mortgage costs. Thanks very much for the replies.

Funny_old_game

I'm afraid most of the heavyweight lenders will not count it and deem it self funding do excluding from your borrowing amount.

If there are other smaller or non conforming lenders who would entertain let the brokers in here decide.

Let_Us_See

I agree. Some lenders will accept the rent from an unencumbered property, however the majority will not as they view rental income as non-guaranteed income.