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If you own a house and rent it out and then

(7 Posts)
KIttyWalker Thu 17-Sep-09 19:22:26

want to buy another house do they take the initial mortgage as an income or can you only top your initial mortgage up IYSWIM - not sure I've explained that very well hmm

ThingumyandBob Fri 18-Sep-09 09:17:49

If you want to buy another house then the lender will take into account your existing mortgage and depending on their rules and how long you have let your property for they will take into account the rent you receive and of course your own household income.

You can either borrow the money for your new house and secure it against the new house itself or against the rented house. You may also be able to secure a portion of money against both houses. It all depends on the values of the houses concerned and how much mortgage you have outstanding already and what rules your lender imposes.

Not all lenders work the same way (some have had their lending restricted by the credit crunch more than others so may have stricter rules, they won’t want you going elsewhere so they will make it sound as though the rules are the same everywhere, not so!) so it’s worth shopping about and seeing a mortgage adviser face to face.

Things that help are a small value mortgage compared to the value of your property, a good deposit, good rental income that has been continuous or fairly gap free for a long time.

BadgersPaws Fri 18-Sep-09 12:35:22

I didn't think that a normal mortgage allowed you to let the property out to other people. My mortgages have certainly stated that I should be the resident.

If you're letting a property then you can get a buy to let mortgage that is seen as being somewhat separate from your normal home mortgage. So in theory you could have many buy to let mortgages on many other properties and still have a normal mortgage on the place that you live in.

However buy to let mortgages could be a bit tricky to get in the current economic climate.

So before contacting your mortgage company check through your paperwork and see if they allow you to let the house out to tenants.

McDreamy Wed 23-Sep-09 09:38:19

You need permission from your mortgage company to rent out your house - some say yes some say no some make you transfer to a buy to let. Ours said yes!

scaryteacher Wed 23-Sep-09 10:42:20

Ours said yes as well, but we're HM Forces so they tend to.

McDreamy Wed 23-Sep-09 11:11:03

Yes we're the same scaryteacher. They tend to let you rent out for longer if HM Forces don't they? I had a flat when I as in my 20's (such along time ago), joined up and my mortgage company never put me on a commercial rate - which was nice smile

scaryteacher Wed 23-Sep-09 11:14:11

I think it's because there is a gentleman's agreement with MoD (or it may be legislation now) that they are not allowed to penalise Forces families due to their jobs.

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