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Let to Buy Query re:rental income
tightasagnats
Posts: 391 Forumite
My question pertains to income from lodgers on a second property in which I would live after taking a Let to Buy on my current flat. Would a lender take into account income from rent generated from potential lodgers. Here's the situation :
If I had a Let to Buy mortgage on the current flat, value now £330,000 - owe £120,000 (£210,000 equity) I could get a BTL mortgage for 75% which I calc to be about £247,000 - minus the £120,000 owed leaves £127,000 toward a new property.
I earn £25,000 a year so could raise about £125,000 which I managed a year ago no probs.
However, this doesn't allow for enough for purchase of new property, total would be approx £250,000 and I need about £400,000 for a three bed.
My question now: would a lender consider rental income from lodgers in NEW property as income? I have always let a room in current flat and would wish to continue, and in new property would have two rooms to rent (in addition my own) and this would generate £1300-£1400 a month minimum in addition to my salary. London so no problem ever getting lodgers and have statements going back years showing rental income from lodgers in current flat.
I like to think of these lodgers as flatmates, but lodger is a legal term and I use it to differentiate from tenants which is legally very different. Tenants would be in the let to buy ie current flat.
Thanks
If I had a Let to Buy mortgage on the current flat, value now £330,000 - owe £120,000 (£210,000 equity) I could get a BTL mortgage for 75% which I calc to be about £247,000 - minus the £120,000 owed leaves £127,000 toward a new property.
I earn £25,000 a year so could raise about £125,000 which I managed a year ago no probs.
However, this doesn't allow for enough for purchase of new property, total would be approx £250,000 and I need about £400,000 for a three bed.
My question now: would a lender consider rental income from lodgers in NEW property as income? I have always let a room in current flat and would wish to continue, and in new property would have two rooms to rent (in addition my own) and this would generate £1300-£1400 a month minimum in addition to my salary. London so no problem ever getting lodgers and have statements going back years showing rental income from lodgers in current flat.
I like to think of these lodgers as flatmates, but lodger is a legal term and I use it to differentiate from tenants which is legally very different. Tenants would be in the let to buy ie current flat.
Thanks
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Comments
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No they will not take that into account.
Plan B !0 -
On what basis are you replying? My understanding is that some lenders do consider such income, it was considered by my lender in the past when remortgaging.
No problem if the answer is no, but it'd be nice to know if that's an informed answer or your hunch/personal experience.0 -
No evidence of income = income not taken into account.
You would need to be able to evidence such income for a couple of years before you have a hope of finding a lender willing to accept it.
Regardless of the evidence, most won't.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Thanks, that's helpful. Plan B it is then, as suggested
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