Some Mortgage Advice Please (2nd Mortgage)

[BoozyBabe]

Hi all.

My partner & I are planning on building our home in the near future & will be shortly starting the whole planning process, mortgage, etc.

We already have the land, so only require a loan for the actual building.

The thing is, & I don't know if this is a help or a hindrance for us:- I already own a property & so I already have a mortgage. (less than 100k)

I have the property less than 4 years, so I wouldn't have much of the actual loan paid off, but I'd imagine the property has increased in value by approx 30k.

It is a rental property & the total monthly mortgage repayments are being covered by the rental income.

So, in a nutshell, if we both had no loans, (i.e. my existing mortgage), our salaries & our savings would allow us to get the amt of money we need no problem, going by all the guidelines on the net.
But, my question is, will the fact that I already have a mortgage mean we'll be able to borrow more than normal, less than normal, or more or less unaffected?

Thanks,
Hope I'm making sense!
BB

 

[LDFerguson]

Most lenders will take into account about 75 - 80% of your rental income, to allow for tax on rent, gaps between tenants etc.

If 75 - 80% of your rent is still covering the mortgage repayments, it will not impact on your ability to borrow again. If it exceeds your repayments, it will be seen as a small additional source of income. If it's less, it will be seen as a liability.

 

[BoozyBabe]

Thanks very much for that.

Taking the 75-80% of the rent that you mention, would leave them seeing me having to cover just €60-90 per month on that mortgage.

Hardly going to affect us terribly then.

Thanks again.