Let to buy mortgages with high debt to income ratio

K_S

whispy25 said:

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 Based on the limited info in your posts, I think you should have options for the BTL part of the equation to remortgage to a 75% LTV BTL mortgage. Unless Accord told you clearly that they can only offer a max of 71% LTV due to your debt to income ratio, it's not clear to me that that would be the only reason.

Having said that, the other part (the resi mortgage) also needs to fall in place for the whole thing to work. I can see that you've not been treated as you'd expect by your ex-broker but this whole thing is definitely one for a broker who can look at the whole picture and give you a realistic view of your chances.

The answer may be that you are unlikely to be able to do what you want mortgage-wise, but a good broker will tell you that clearly, and what needs to be done to get to a position where you can proceed.

whispy25

I was told that the 71% was to do with the rental income valuation??  Is it called a stress test?  I don't understand how these figures are calculated.

With regards to needing a broker, how do I go about getting a reputable, experienced one?

K_S

whispy25 said:

I was told that the 71% was to do with the rental income valuation??  Is it called a stress test?  I don't understand how these figures are calculated.
With regards to needing a broker, how do I go about getting a reputable, experienced one?

@whispy25 Ok, that makes more sense. If you do an Accord stress test for a 2 year fix at 1150 rent and 280k property value, you'll get a max borrowing of about 71%. You may be able to opt for a 5 year fix to up the LTV to 75%. Above 75% LTV is expensive territory and your options (if any) are likely to be severely limited.

The stress test is an affordability test for BTL properties, it doesn't have anything to do with your personal debt to income.

As to how to find a broker, I would recommend the MSE guide, getting recommendations from friends, colleagues, etc.

Grumpy_chap

whispy25 said:

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.  

What level of BTL LTV do you want / need?  Typically max 75% is possible, so the 71% is not a bad position.

You already seem to be geared to 5.5 years income (salary) multiple with the existing mortgage.  Plus the £28k additional debts.  In total 6.75 times salary.

What finance do you need for the house with your husband, or will that be in his name?
Have you considered putting everything into joint names?  Does your husband have higher earnings that will support a greater level of debt?

whispy25

I would ideally want at least 75% min ltv.
I thought ltb mortgages did not take into account your earnings?  

My husband earns 4 x my salary but my current lender will not put his name on my mortgage because he has two 14 month old secured defaults relating to his ex wife and her new husband not keeping up with the mortgage payments on a property in his name.  (Both cleared and settled in full upon sale completion).  Can I just ask for him to be included on an application with another lender for this ltb mortgage?  

We would like the new house to be in his name only to avoid stamp duty, but my name has to go on it I believe, because I am releasing equity from my house as deposit.

Grumpy_chap

You need a good Broker.

BTL mortgages are sometime based on the property alone, but when that does not quite stack up, the lenders can "top-slice" where they consider spare affordability from earned income / salary.

whispy25

Yes.. hopefully I will come across one.  
Thank you for your responses... :-)

MWT

whispy25 said:

Yes.. hopefully I will come across one.  
Thank you for your responses... :-)

You already have come across one in this thread...

Brokers are not permitted to directly offer their services to forum members, but members are allowed to contact them directly if they wish...

[Deleted User]

Accord do not have a max debt to income ratio on BTL as far as I know but in the back of my head i feel they have a cut off at 100% for resi cases. Or at least they start to question things a bit more at that level.   With LTB mortgages being regulated its possible they apply the same limits as resi cases.    

There are ltb lenders who specifically state they do not look at debt to income ratio's so a fresh look at the case is probably in order