Let to buy mortgages with high debt to income ratio

whispy25

I want to remortgage and let my home out so that I can buy a new house with my husband. 

I have an Experian credit score of 998 excellent.  No late / missed payments ever.  Due to redundancy 2 years ago I now earn a lot less, so my debt to income ratio is high due to a car I have on finance, even though I can easily afford it.  I do not want to get rid of my car.  Are there lenders that will consider me?

K_S

@whispy25 How much you can potentially release from the to-be-rental property by remortgaging to a BTL will depend primarily on the estimated rental income, though a few lenders will consider earned income as well to increase the borrowing. For BTL lenders who base borrowing on the rent, your outgoings largely do not matter.

If the property is in your sole name (and you intend it to remain that way), and you have a clean credit history, you should have options, even though it'll be slightly reduced due to being a first time landlord.

I'll leave the second part of the let2buy - the onward residential purchase - out of it as I believe you have another thread going on that. Good luck!

MovingForwards

Credit scores are not seen or used it's credit history, much easier to stick with one thread rather than keep asking questions and missing key information out about credit history:

https://forums.moneysavingexpert.com/discussion/6228391/90-mortgage-with-iva-and-historic-mortgage-defaults#latest

whispy25

Thank you k_s.  As you say I have two independent threads I have questions on.  I need to deal with the issues on this application before I move onto the seperate mortgage  application with my husband on our potential new home together.
The reason I am confused about let to buy mortgages is because I have been rejected for high debt to income even though I have a clean credit report. I am now concerned about applying elsewhere and being rejected again.

K_S

@whispy25 Are you saying you have been rejected for a BTL mortgage due to "high debt to income"? May I ask which lender please?

whispy25

Yes that was with Accord.  They initially gave a DIP and I was waiting for a valuer to get in touch.  I started chasing after two weeks of hearing nothing.  On week 3 they advised that my application had been declined.  Nothing had changed financially on my side.

K_S

@whispy25 Overall indebtness is often taken into account by a lot of BTL lenders, but it only ever becomes an issue at very high levels, say approaching 10x (generally speaking). Having one car on finance is hardly going to do that, unless you drive a Bentley!

If you don't mind sharing this info -

- what is your income and debt, and what kind of debt?

- also, did the broker say he couldn't place you with any BTL lender at all?

- and what was the LTV that you applied for?

Grumpy_chap

I think the OP would best engaging the services of a mortgage broker to assess the viability of both the BTL and the residential mortgage that are going to be required.  These really need to be looked at as a package solution to achieve the overall goal of maintaining the current property as BTL plus new mortgage for new home with husband.

I have read the OP that there is no existing mortgage on the property that is to become BTL.  Is that correct?

whispy25

Ha no not a Bentley.   My car is 20k and I have an additional 8k for a boiler, furniture and credit card.  My mortgage is 147k income is 26k.

Accord would only give 71% ltv.  I want a higher ltv than this. House valued at £280k with rental valued at £1150 pcm. 

I have not been back in touch with the broker since November because I had to find out for myself by contacting Accord direct that my application had been declined.   

whispy25

Hi Grumpy Chap,  thank you for your reply.  I have been round in circles with an independent fa. I was given hope initially but months later, feeling very frustrated and confused, I am no further forward.

I wish I was fortunate enough to be mortgage free, but no, I have an existing mortgage. 

whispy25

Hi K_S,  sorry, I just wanted to add, all outstanding borrowing, other than my car, is due for completion within 10 months.