Applying for 2nd Mortgage?

[R196]

Hi,

I am applying for 2nd mortgage next month. my current house is rented out. in neg quity of approx 130k - tracker - ptsb - mortgage 250k left

my wife and i have steady jobs - total income 60k + 650p/m rental income.

house i want is 150k - i have 30k - will bank take rental income into acount when i apply?? if not i have no hope of getting mortgage.

thanks

 

[cloughy]

unlikely to get a mortgage, you want total borrowings of 250+120k = €370k on a combined salary of €60, 6 times multipla, and with the negative equity in your BTL,

how much are you paying back to PTSB and what could yo afford to pay on the new loan, they would probably only allow 30-35% of net income to service loans, and Rental (after tax) would only cover the tracker interest,

Interest on new loan, likely to be circ 3-4%, so for a 20 year term, to clear both loans, you are looking at €1500 for just the capital element, and then the interest would be circ €800 between the two, so net €2800 per month, which even taking off the rent, is stil la significant amount of your gross, let alone your net salary

 

[R196]

850 being paid back to PTSB. Could afford to pay back €1300 comfortably on new loan - when realistically a 25-30 yr loan of 120k would not be much more than 800 p/m (i assume).

are BOI to the only bank lending?

 

[ryaner]

What happens on the months that you don't have the property rented? They say to plan for 1 month a year idle. Banks I believe only take 60% of your rental income as actual income too.

They also stress test the interest rates by 2-3% higher.
120k @5% over 30years is 644.19
120k @5% over 30years is 880.52

Bigger increase would be on your current tracker due to the higher loan amount.

250k @2% over 30years is 920.35
250k @5% over 30years is 1336.69

 

[kildon]

generally speaking banks will take 80% of rental income (must be evidenced)

when assessing your affordability, bank will see if you can aford both loans at a stressed mortgage interest rate, which is svr + 2%