Mortgage allowances

[HandsomeBob]

Hi all,

This may be a silly question but say if you have a mortgage allowance of say £120,000 and you purchase a property and use up £100,000 of the allowance would I only have £20,000 if I wanted to purchase a buy to let?

If I had the 25% deposit required for the BTL, how is the mortgage allowance calculated?

Many thanks, any help would be extremely helpful

[Sarnie]

I think you'll need to explain in a little more detail what you mean....

[HandsomeBob]

Hard to explain but brokers told me a lender is willing to lend me £130,000, I have purchased a flat recently using £110,000 of it...does this mean I cannot buy another as I would only have £20,000 remaining

[dontfollowme]

HandsomeBob said:

Hard to explain but brokers told me a lender is willing to lend me £130,000, I have purchased a flat recently using £110,000 of it...does this mean I cannot buy another as I would only have £120,000 remaining

Do you mean £20K remaining?

[HandsomeBob]

Sorry edited

[Sarnie]

No.

Your affordability for Residential purposes has not effect on a BTL purchase which is based on the LTV and rental recieved. You will need a minimum salary of £25k+ with most lenders.

[HandsomeBob]

Thank you so I could deposit permitting could buy a £200k BTL for example?

Thanks

[Sarnie]

HandsomeBob said:

Thank you so I could deposit permitting could buy a £200k BTL for example?

Thanks

In theory yes, the rental would need to be sufficient, but yes.

[sc0tt]

HandsomeBob said:

Thank you so I could deposit permitting could buy a £200k BTL for example?

Thanks

Probably not. generally btw needs 30% deposit.

[Sarnie]

sc0tt said:

Probably not. generally btw needs 30% deposit.

Not correct.

[Alpinestars]

Two completely independent lends. A BTL will generally be based on LTV and rent to interest ratios. Nothing to do with your salary and you would not be able to use any "buffer" you've not used on your own home to fund a BTL. The only way you could do that is to buy a more expensive house, draw down the maximum mortgage and use the surplus to fund the BTL.

[HandsomeBob]

Thanks for all your help.

Issue I have atm is not being able to gain a mortgage as I do not have a full years accounts due to being self employed. Existing mortgage is under gf's name. providing I have the deposit for a circa £200k property, would they need to 1 years accounts?

Many thanks

[Sarnie]

HandsomeBob said:

Thanks for all your help.

Issue I have atm is not being able to gain a mortgage as I do not have a full years accounts due to being self employed. Existing mortgage is under gf's name. providing I have the deposit for a circa £200k property, would they need to 1 years accounts?

Many thanks

I can help