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Home move and rental property.

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  • 30-07-2015 8:20pm
    #1
    Thestart
    Registered Users Posts: 130 ✭✭


    Hi All,
    just if anyone can help me.
    Want to move house and have 2 rentals. See details below.
    2 rentals (apartments) outstanding mortgages €298k, sale value €290. €1417 mortgage cost, income €2350 per month. Management fees €1800 year. little or no void periods. Home and rentals are with 3 different lenders.
    How do the bank look at this from a point of view of how much we can borrow?
    I can put them into a rental scheme with county council but rent is only €1940 fixed for 4+ years.
    Ptsb is the bank we are most likely to go with at they let you move your tracker.
    €108k total income, public servant (56K) and private sector (52K).
    2 kids, 3 and 5 looked after by my Mother.
    I'm going to call bank or broker but wanted to get heads up first if possible.
    Thanks,
    TheStart.


Comments

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    #2
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    Is that rental income figure net of tax?


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    #3
    Thestart
    Registered Users Posts: 130 ✭✭Thestart


    athtrasna wrote: »
    Is that rental income figure net of tax?

    Hi Athtrasna,
    no its before tax. They just wash their hands.
    TheStart


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    #4
    athtrasna
    Closed Accounts Posts: 13,420 ✭✭✭✭athtrasna


    Thestart wrote: »
    Hi Athtrasna,
    no its before tax. They just wash their hands.
    TheStart

    Not sure what you're saying there? Given your PAYE income you are both in the higher tax band so your tax liability on the rented properties would be significant.


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    #5
    dori_dormer
    Registered Users Posts: 1,919 ✭✭✭dori_dormer


    My sister is in a similar situation to yourself except with lower numbers. She was told to throw everything they had at the investment mortgages to get them out of negative equity, sell them and then come back to them.

    She was looking for a 300k mortgage and had 20% deposit. But would have to forfeit most of deposit to get out of neg equity, or wait around 5 yrs using income etc. she's sitting tight at the moment.


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    #6
    Thestart
    Registered Users Posts: 130 ✭✭Thestart


    athtrasna wrote: »
    Not sure what you're saying there? Given your PAYE income you are both in the higher tax band so your tax liability on the rented properties would be significant.

    We should have a tax bill of €9000 max. Total income is €28200, costs €11500, taxable income €16700 52%=€8684.
    €17000 mortgage costs €20000 income after tax. Washing their hands, I think!!!!!


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    #7
    zl1whqvjs75cdy
    Closed Accounts Posts: 4,042 ✭✭✭zl1whqvjs75cdy


    From other similar threads in here the banks don't seem to be taking rental income as part of your household income as it can be uncertain. Equally, they don't seem to be taking equity (if any) on other properties into account. In fact the negative equity will probably hurt your application. That's just from what I've seen on here though, not personal experience so take all that with a pinch of salt.


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    #8
    sunnysoutheast
    Registered Users Posts: 2,072 ✭✭✭sunnysoutheast


    Thestart wrote: »
    We should have a tax bill of €9000 max. Total income is €28200, costs €11500, taxable income €16700 52%=€8684.
    €17000 mortgage costs €20000 income after tax. Washing their hands, I think!!!!!

    Do I read it right that you could sell the apartments for an 8k one-off loss? Might even get that figure down a bit in a rising market.


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    #9
    Thestart
    Registered Users Posts: 130 ✭✭Thestart


    sunnysoutheast wrote: »
    Do I read it right that you could sell the apartments for an 8k one-off loss? Might even get that figure down a bit in a rising market.

    Correct. Don't want to sell. Am happy in house at the moment but would like to live closer to city if I can in near to medium term.


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    #10
    dori_dormer
    Registered Users Posts: 1,919 ✭✭✭dori_dormer


    I'd be getting those properties out of negative equity before even approaching the bank. Like already said it'll hurt your application, and with the current income 8k won't take too long.

    Your deposit amount will also make a difference and whether it is tied to the sale of your house etc.


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    #11
    MarkAnthony
    Closed Accounts Posts: 6,934 ✭✭✭MarkAnthony


    Some of the rental income will be considered by some of the banks.

    I have a sneaking suspicion some are very ready to look at it on the basis on 'getting around' the CB rules on Loan to Income. I don't recommend brokers but others do. I do on the other hand highly recommend KBC who could not have been more helpful in our case.


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    #12
    Thestart
    Registered Users Posts: 130 ✭✭Thestart


    MarkAnthony wrote: »
    Some of the rental income will be considered by some of the banks.

    I have a sneaking suspicion some are very ready to look at it on the basis on 'getting around' the CB rules on Loan to Income. I don't recommend brokers but others do. I do on the other hand highly recommend KBC who could not have been more helpful in our case.

    Thanks MarkAnthony I'll give them a call and see what they say.


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