How much can we borrow

Newheight13

Hello,

We have 2 properties at 225k, one resi and one BTL. 45k in the resi and 80k equity for BTL. 

We have 55k in debt. (35k) on refurb for BTL. 

Combined salary of 100k, plus 2 years of accounts for the BTL 20k an annum. 

If we sold our resi, how much could we borrow with the debt in mind? 

Also, I’ve been told that we can relate 35k from the BTL, could we purchase a 300k property with 5% deposit? I’m aware land tax would be 20k. If we could keep resi as another BTL that would be good and make buying this 300k property a lot easier as no chain. 

We also have 10k in the bank. 

Many thanks

ACG

This is quite a complex to answer. But assuming you put £35k of the debt down as expenses on your self assessment then some lenders (not all) will ignore it for affordability purposes. 

With regards to the debt in your name (either £20k or £55k) if it is credit cards, lenders use the balance. If loans they use the repayments. 

General rule of thumb would be 4.5x your income. But I am assuming you may be a little older - so age may play a factor and also depending on whether the debt we are looking at is £20k or £55k that may affect things but with your incomes probably not massively. 

I would suggest speaking to a broker. They can get everything needed (as there is a lot more information needed) and give you a more accurate answer.