£120k mortgage on £34k income?

Alias_Omega

Looking at the concept of buying another house.

Would be -

Property 1 -
Value £60k.
BTL Mortgage £36k over 15yrs.
Previously Let via Consent to Let for 3yrs.
Annual income £4680.

Property 2 -
Value £120k
Deposit £36k
Residential Mortgage £84k over 25yrs.

Estimated Mortgage Costs (@5yr fixed rates)
Property 1 = £300 pm
Property 2 = £400 pm
Property 1 & 2 = £700 at Worst Case.

As of now, Married 3 children.
Single income of £34,000 (before tax).
Total Income after CB, CTC, Child Maint = £2700 ishy a month.

Credit cards paid off each month. No loans. No childcare.

Mrs B Student. Student loan..unsure on amount. Plans to work Part-Time along with Uni Course.

Really want to speak to the Mortgage Broker on Saturday about this. Weekend time is sparce as i work Mon-Fri 7am-6pm..

Is £120,000 possible, without wasting Brokers time?

Dave_Ham

You will certainly not be wasting the brokers time, as there is enough to go at and would imagine a fair solution.


They will obviously go into this in more detail and require more information, but definitely worth having a chat with them


Good luck

Alias_Omega

Local rent is probably £550-600, so its a win-win situation for the buying area.

Just a little nervous about the whole "risk" of it all.

Thrugelmir

What's your net annual after tax profit on property one ?

Rental income while important isn't what counts.

Alias_Omega

Roughly. .

Income is £5000

Deductions vary depending how we wanted to fall with inland revenue. No profit means no tax.

However, roughly

Mortgage interest £2000
Landlord insurance £150
Wear tear £500
Gas check £65
Tenant services £200

So less maintenance or repairs is about £2k.

Figures rounded as on phone, not laptop

Alias_Omega

Update..

Spoke to Halifax person, going back on Friday. Was a little shocked by the BTL 4.39% plus, a whopping £995 fee. It will be nice to get a feel for the market before going to the Mortgage Broker.

We have made touch with the guy we used 5 1/2 years ago, but he does not work there anymore. Instead his replacement will see us out of hours..as I work 7am - 6pm with commuting.

Thrugelmir

Alias_Omega wrote: »

Was a little shocked by the BTL 4.39% plus, a whopping £995 fee.

Lenders are assessing borrowers ability to pay 7%. A 4% rate is cheap!

Alias_Omega

I was shocked at the rate compared to residential rates, however we fixed it for 5 years at 6.02% when we initially bought the house....so not that shocked.

It costs what it costs..