how much of a 2nd mortgage?????

B

bilbob

Guest
We looking to buy a 2nd house, current combined income of 80k, house value of 450k mortgage of 280k- how much does anyone reckon the banks would give us???
 
If you had 80k in household income and no debt other than existing mortgage, I would guess they would give a mortgage of 300 - 350K total.

When you say 2nd house, I assume you mean second investment property with expected rental income. You already have a mortgage of 280K, so you do not have a lot left out of 300 - 350K. My guess is that you would need to put forward a very convincing case for the rental income you would get from the 2nd house to have a chance. The banks view would be that if you don't secure strong / secure rental income, you would be left in a pickle. Banks are more interested in ability to pay than the equity you bring to the table.

I'm in a similar situation with the same approx household income, similar equity, but my existing mortgage is only 50K (house value 220K approx). Buying a 2nd house for the same value as my home only means a mortgage of 270K (excluding stamp duty, etc). I don't have to be so convincing on rental income, if at all.
 
I am looking into doing something similar to you. I have a house with a remaining mortgage of 130K. I am buying a site and then building. From initial talks with the bank, they were willing to give myself and my partner 395K. Our joint income is about 75K.
If we did want more than 395K I could release equity from my existing house. This may be an option for you. It depends on the value of your existing house though and the amount outstanding on your mortgage. It may be worth asking about this.
 
The key factor in all these enquiries is how much rent you would anticipate getting from the investment property. If you have sufficient equity in your own house it is possible to cover 100% of the purchase of an investment (and the Stamp/expenses) but bear in mind that lenders generally take 70/80% of the rental income into account and stress test the total indebtedness by 2% over current rates on an annuity basis (ever if it's proposed to take the investment mortgage on interest only).

Sarah

www.rea.ie
 
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