Are we likely to qualify for second mortgage?

A

Advicepls

Registered User
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Hi there,

Just looking for advice on whether my husband and I would qualify for a second mortgage. I would contact a broker but we are not ready to move yet and they all seem to charge a fee now. We would like to move some time next year, our details are as follows:

Mortgage remaining: 340k, 29 years remaining
(Property worth 220 realistically)

We hope to rent this property out and the going rate for rent in our area is 1100 pm.

Husband
31 years old
Salary: 82k
Bonus: 10k

Me:
31 years old
Salary: 39k

1 child

We currently have 25k in savings and are saving 2k per month. We have no other loans apartment from mortgage. We are looking to move back to our home place where prices have dropped massively. We would hope to start looking when we have 60k saved (mid next year). We would be looking for around 200k at minimum. Anyone out there in the know, know if this is possible?
 
Your best bet is to enter your details on an online mortgage calculator with 1 of the financial institutions to assess how much you could borrow based on the above info.
Savings record will be a positive & if the sums add up you should be well placed to obtain approval. Negative equity on former house should not be an issue in respect of new proposal. Repayment & savings record will work positively in your favour.
 
Thank you for getting back to me Brendan. To be honest its very hard to tell from a mortgage calculator as there is no space for me to enter the fact that we have a loan of of 340k.

I am wondering if it works like this:

Say the bank would give us 5 x our salary which is 121 x 5 = 605 (I'm not sure if they even give multiples of 5 anymore)

Do I then take 340 away from this figure: 605 - 340= 265 and this is the amount we can borrow?

Or is it worked out on your monthly outgoings?

Sorry I'm totally clueless, I did try and contact the broker that we used when buying our currect house but they seem to be gone now and I believe that the amount banks will tell you that you have approval in principle for, can be very different to the amount you get when they properly go through all the figues.

Will they not see that we have neg eq and even though we could afford to still pay our mortgage and a new one, decide to not touch us?
 
OK. Here is a brief summary of your position from a Banks perspective:
Total gross income 131K (including sensitised rental income)
Total tax 44.3K
Net disposable income 86.7K
Living expenses 31.2K ( 2 adults, 2 cars, 1 child, no childminding expense)
Balance 55.5K
Existing loan repayments at 6% stress rate - 24.8K
New loan repayments 31K (based on 400K loan over 25 years at 6% stress rate)
I.e. based on these parameters you would be able to service a maximum 400K loan.
Figures are broad, but can you used as an indicator of what you could borrow.
 
Wow that was really helpful, thank you so much. We are currently paying childcare of 600pm (which will drop significantly if and when we move) but only have 1 small car with no loan. I assume the amount we can borrow will be reduced on account of this, but to even qualify for any amount over 200 would be fantastic.
 
I just wanted to also ask, based on our scenario above, what percentage deposit are we likely to need for the second property? I know that kbc is 20% now, are all banks the same does anyone know?
 
Advicepls said:
Mortgage remaining: 340k, 29 years remaining
(Property worth 220 realistically)

We hope to rent this property out and the going rate for rent in our area is 1100 pm.
Click to expand...

Where are you getting the value from? And what is the current mortgage repayments. Would the bank change you from your current home loan rate to an investment rate.

Apart from the prospect of buying have you done the figures of renting. Have you investigated the rental market. Do you know how difficult it is to be a landlord?
 
Bronte said:
Where are you getting the value from? And what is the current mortgage repayments. Would the bank change you from your current home loan rate to an investment rate.

Apart from the prospect of buying have you done the figures of renting. Have you investigated the rental market. Do you know how difficult it is to be a landlord?
Click to expand...

What relevance are the current mortgage repayments to my post?

There is nothing in my contract to say that my rate will change if I rent my home out.

Yes I have done the figures for renting. I don't think we will have any problem renting the property.

No, not being a landlord I am not aware how difficult it is. However, if we want to move it is our only option.
 
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