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Confused by mortgage decline
dlk
Posts: 263 Forumite
I just wondered if anyone in the mortgage industry ie a broker could shed any light as to why this decline might be the case.
Its a buy to let I own.
Value £130
Mortgage 66k
I asked for further borrowing of £23k for home improvements at my own home which they said was fine. The LTV is fine.
However, its been with the same tenant for many years who's a perfect tenant and I only charge £600pm.
She said that was what the application fell down on and they could only lend me an additional £75 at that rent. Yes, £75 not £75k.
The total mortgage repayments would have been £267pm. She said had the rent been £700pm it would have been approved so the decline is down to rent coverage.
£267 mortgage rent £600?
Thats more than 200% rental coverage so I dont get it. Am I missing something or does it seem a bit odd.
Its a buy to let I own.
Value £130
Mortgage 66k
I asked for further borrowing of £23k for home improvements at my own home which they said was fine. The LTV is fine.
However, its been with the same tenant for many years who's a perfect tenant and I only charge £600pm.
She said that was what the application fell down on and they could only lend me an additional £75 at that rent. Yes, £75 not £75k.
The total mortgage repayments would have been £267pm. She said had the rent been £700pm it would have been approved so the decline is down to rent coverage.
£267 mortgage rent £600?
Thats more than 200% rental coverage so I dont get it. Am I missing something or does it seem a bit odd.
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This is not simply about rent coverage.
Most likely hurdle is that you are a higher rate tax payer and this makes the 'affordability' calculation far tighter.
Your current mortgage rate and term can also be a factor.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, 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.0 -
I'm not a higher rate taxpayer and she didn't ask for my income. She said it was just the rent amount versus mortgage payment. The £267pm i mentioned was including my existing payment.amnblog said:This is not simply about rent coverage.
Most likely hurdle is that you are a higher rate tax payer and this makes the 'affordability' calculation far tighter.
Your current mortgage rate and term can also be a factor.0
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