PPR mortgage when main income is from rent

M

MaryHeidel

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Hi,

My girlfriend and I own an unencumbered rental property in Dublin city centre. As I am only beginning to trade in my new business, the rental income from this property is my main source of income at the moment. My girlfriend is a nurse in a full time permanent job.

Is there any reason why we shouldn't be approved for a mortgage using the rent as my income (gross rent less expenses etc)?

Thanks
 
As far as I know rent is not counted by banks as income. Once upon a time it was counted for affordability
 
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Revenue class rent as income, I do not see any reason why banks would not.
 
Bit of both, banks usually take a percentage of rental income as income. They discount quite a bit to allow for empty periods or any other unexpected costs.
 
Monbretia said:
Bit of both, banks usually take a percentage of rental income as income. They discount quite a bit to allow for empty periods or any other unexpected costs.
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It was the case that they counted rent, but my understanding since the crash is that they don't any more. You have to demonstrate you can pay them investment mortgage based on salary, not rent.
 
Bronte,

I think that all banks operating in Ireland still take a discounted rental income figure into account, when assessing affordability on a mortgage. I do not think that MaryHeidel will have any problems getting a mortgage, given that he has an unencumbered property that the bank can use as collateral against the mortgage ( that being of course, if the discounted rental income does not meet the banks affordability criteria ).
 
Mary

Why not sell the rental property and buy your home with the proceeds.

You are being taxed on your rental income but get no tax relief on the mortgage interest you would pay. This explains the principle - of course, your actual figures will be different:

upload_2015-9-25_14-54-8.png
 
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