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Rental income when applying for mortgage

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  • 05-01-2017 12:32pm
    #1
    Plasandrunt
    Registered Users Posts: 858 ✭✭✭


    Hi.

    I purchased a 2 bed appartment back in June, i recieved money after the death of a relative and it allowed me to purchase the property in cash. Now I'm looking into the possibility of getting a mortgage and buying a house.

    The plan is to sell the appartment and use the proceeds combined with a relatively small mortgage (about 100k) to buy a decent house. I'm 29, single with no dependants and am on about 32k a year. Just wondering if any banks will take into consideration the fact that one of my friends lives with me and pays €450 including bills. She's planning to stay with me for the forseeeable future and all transactions have been done via bank accounts.


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    #2
    Michael D Not Higgins
    Registered Users Posts: 7,223 ✭✭✭Michael D Not Higgins


    Very unlikely, it's the kind of thing that happened in 2006 where every bank factored in a lodger to bump up the allowable mortgage, but not anymore.

    If you're on 32k, then your allowable borrowings are 112k. If the rest can be made up with savings and the sale of the apartment, why bother worrying about the money paid by your lodger?


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    #3
    Plasandrunt
    Registered Users Posts: 858 ✭✭✭Plasandrunt


    ah ok i suppose that's pretty understandable. I knew that I'd be able to get upto 3.5 times my salary but i'm currently paying back a bank loan (€280 per month) and any mortgage calculators I've used I generally only get approved for less then the 100k I'm looking for but when i factor in the extra 5k a year in rental income the online calculators easily approve me for the mortgage.

    I suppose i should really go to a broker and/or talk to someone from the bank rather then just going by on online calculators


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