What's the rough ball-park for what banks loan?

grafter101

This may well be a piece of string but am just curious as to what banks today are *very roughly / rule of thumb* loaning, in terms of:

- n times salary of a teacher (the missus) who has been in steady employment since university, history of "good" credit, no CCJs etc?

- Someone who is self employed (me) with approx 1.5 years' proof of solid income, history of "good" credit, no CCJs etc.

There are some other soft factors here, as the bank I'm looking to borrow off already know me for the past several years and have clear insight into how I manage my finances, we'd probably put down a deposit of around £80k (most likely on a property worth possibly around £230k), and I own outright a property worth almost £250k, although the bank said they can't take the latter into any consideration nor use it as a security. (I'm not wanting to sell the property I own outright so I'd effectively be starting from scratch in terms of asking for a loan, if that makes sense).

Thanks in advance,
Paul

ACG

Between 4-5x income is where its at.
Some lenders might stretch to 5.5x others may cap atless than 4x but it gives you an idea.

It is more affordability based now though, so if you were on £40k and had a £10k car loan, £5k credit card at 14 kids then its likely to be less than £160k.

Also the way it is calculated for self employed people differs. Some lenders will want 1 years accounts, others will want 3. They may use the latest figure or an average of the last 2-3 years. I think its a bit too early at this stage to have decided on a lender unless you want a small loan.

HappyMJ

Pre crash was to lend money even if the customer couldn't prove any income at all. That's why there was a crash. You could borrow up to and maybe even a bit more than 5 times your salary with a broker helping you.

If you already own a property is that property either let or to be let. You could borrow money against that asset on a BTL or LTB mortgage and not have any other income counted as the rental income will cover the mortgage repayments when charged on an interest only basis.

You'll need some sort of income to prove you can support yourself without the need to use the rental income to pay for your day to day living expenses.

grafter101

HappyMJ wrote: »

If you already own a property is that property either let or to be let. You could borrow money against that asset on a BTL or LTB mortgage and not have any other income counted as the rental income will cover the mortgage repayments when charged on an interest only basis.

You'll need some sort of income to prove you can support yourself without the need to use the rental income to pay for your day to day living expenses.

The property I own outright is consistently let out. It'd be great to release some of the cash in the property to use against a deposit for the second property, although I'm assuming(?) that whatever I take out against the property I already own would only be counted against me and offset against what the bank would lend me on the second property anyway? I.e. if I took out a mortgage of £50k on the property I already own, then the bank would view that as me having a debt of £50k and therefore lend me £50k less for the second property than they would have done to begin with? (Forgive me if I'm being ignorant on that one!)

The rental income is (now) secondary to what my small business brings in, and I literally keep spreadsheets of every single penny in/out for the last 10 years which shows what my gain/loss is at the end of every month. It's not a legal document to my knowledge, but it's something that can be demonstrated.

Anyway, please could you be so kind enough as to elaborate slightly further on the BTL or LTB mortgage on my 1st property that may help me with a loan on the second? I sense I've not fully grasped the detail.

Many TIA,
Paul