Second Mortgage advice

Boxtrot

Hi All
Need some advice on 2nd mortgage , currently have a tracker mortgage 1.6% above ecb. 200k remaining, current house value would be around the same 200-210k. Thinking about buying a second property that suits our needs better , and wanted to rent out the first property, combined salaries of 105k per year public service , 30k in savings and banking around 1500 per month in savings. No big loans or credit card debt just 2 kids and normal household expenses.

My question is how much are we likely to get approval for in terms of a mortgage, would it be just 3.5 times the combined salary, and would the existing 200k mortgage be subtracted from that figure or would I get some allowance for renting out the first property.

I'm just wondering if there is any options for me at present instead of selling current home , as I've paid 13 years into the mortgage and I'd like to keep it as a rental if possible.

Any help or advice is appreciated

bee06

My advice would be go see a mortgage broker to talk through your options mortgage wise. Secondly do the maths around renting out your current home and the rent you'll get versus the costs including tax. With such a low mortgage rate you could end up paying out more in tax and the mortgage than you make on the rent.

Boxtrot

bee06 wrote: »

My advice would be go see a mortgage broker to talk through your options mortgage wise. Secondly do the maths around renting out your current home and the rent you'll get versus the costs including tax. With such a low mortgage rate you could end up paying out more in tax and the mortgage than you make on the rent.

Thanks bee but I was kinda hoping to get some advice before speaking to the mortgage broker , incase I was creating false hope!

Little Bubbles

Boxtrot wrote:

I'm just wondering if there is any options for me at present instead of selling current home , as I've paid 13 years into the mortgage and I'd like to keep it as a rental if possible.

Boxtrot wrote:

My question is how much are we likely to get approval for in terms of a mortgage, would it be just 3.5 times the combined salary, and would the existing 200k mortgage be subtracted from that figure or would I get some allowance for renting out the first property.

Boxtrot wrote:

Hi All Need some advice on 2nd mortgage , currently have a tracker mortgage 1.6% above ecb. 200k remaining, current house value would be around the same 200-210k. Thinking about buying a second property that suits our needs better , and wanted to rent out the first property, combined salaries of 105k per year public service , 30k in savings and banking around 1500 per month in savings. No big loans or credit card debt just 2 kids and normal household expenses.

Boxtrot wrote:

Any help or advice is appreciated

We're going through same situation. We're on a lot less combined salary but had over 50k savings. We had similar mortgage you have. We went with kbc. Started first week in September and still ongoing. Just received our formal letter today. There is a lot of waiting and phone calls so be prepared for all that. Just make sure ye have a good saving history.

Trish56

Hi Boxtrot,
You should be able to borrow up to - the lesser of 80% of the purchase price of the new property or 3.5% times joint income. Your existing mortgage will not be deducted from this amount. All lenders treat rental properties differently however majority will take into consideration the rental income and will stress test your tracker mortgage.

Your biggest problem might be coming up with the 20% deposit as 30k would only cover a purchase price of 150k. It is also possible for you to sell your existing property and bring your tracker rate on the existing balance plus 1% to the new property depending on your present lender.
Trish

Boxtrot wrote: »

Hi All
Need some advice on 2nd mortgage , currently have a tracker mortgage 1.6% above ecb. 200k remaining, current house value would be around the same 200-210k. Thinking about buying a second property that suits our needs better , and wanted to rent out the first property, combined salaries of 105k per year public service , 30k in savings and banking around 1500 per month in savings. No big loans or credit card debt just 2 kids and normal household expenses.

My question is how much are we likely to get approval for in terms of a mortgage, would it be just 3.5 times the combined salary, and would the existing 200k mortgage be subtracted from that figure or would I get some allowance for renting out the first property.

I'm just wondering if there is any options for me at present instead of selling current home , as I've paid 13 years into the mortgage and I'd like to keep it as a rental if possible.

Any help or advice is appreciated