Can income from rental property be used to fund a mortgage?

lestergun

Hi,

Wonder if someone can help...

Large(ish) house is owned outright and using similar properties on Rightmove.co.uk for guidance, could be rented for ~£1,400pm.

There's a small flat for sale next door.

Could I let the house and use the income to fund a mortgage on the flat (which I'd live in)?

The monthly mortgage payments would be ~£370.


Currently unemployed. Would this exclude me from getting a mortgage?

Anything else to consider?

Thanks

csgohan4

lestergun wrote: »

Hi,

Wonder if someone can help...

Large(ish) house is owned outright and using similar properties on Rightmove.co.uk for guidance, could be rented for ~£1,400pm.

There's a small flat for sale next door.

Could I let the house and use the income to fund a mortgage on the flat (which I'd live in)?

The monthly mortgage payments would be ~£370.


Currently unemployed. Would this exclude me from getting a mortgage?

Anything else to consider?

Thanks

Your looking at a BTL mortgage.


However since your unemployed and haven't received any salary, you won't be able to get a mortgage unless you have proven forms of income.

Do you have a mortgage on your first house?


Becoming a landlord in itself is a pain and comes a lot of rules and legislations which you must adhere to. You could get an Estate Agent to do this for you. I am not sure how they pay you the rent, either through self assessment declaration, paye or through a limited company.


The second thing is 1400 a month which is about 16800 a year gross, will this be enough to buy the flat next door. Depends what's it's worth I suppose, but most likely no. The multiplier of income is usually 3.5-4.0, sometimes 4.5 if you fit the bill.


Then comes the deposit, do you have any at all?


Maybe best to rent a room or two out and accrue a deposit and look into this option again later. Much later.


Where did you get the figure of 375 a month from? the lowest interest mortgage?

Thrugelmir

lestergun wrote: »

Currently unemployed. Would this exclude me from getting a mortgage?

Anything else to consider?

Thanks

How would you pay the mortgage and your bills for 2 properties if you had no income? Letting property isn't without it's risks. Certainly not guaranteed income.