Remortgage rented property to buy 2nd house.

A

ancuisle

Registered User
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Hi,

I've recently returned from being abroad for the past 15 years. During this time my primary residence was rented out and is still rented out at €2500/month(D14).
The value of the house is aprox. €500K to 550K and has a tracker mortgage with €10K remaining(Sept 2018), the repayments are €450/month.
I am currently setting up my own business so am/will be self-employed but currently have no other recorded income for the past few years(I was traveling) except income from the rental property.
I would prefer to keep and remortgage the rental property to purchase a smaller property valued around €100K to €120K but am unsure if I can do this in my current situation? I have €40K in savings.

Any advice would be greatly appreciated! :)
 
Very unlikely, ability to repay is the number one criteria and with no record of self employment or a permanent job you fall at the first hurdle.

Best bet is ask a mortgage broker, they will know if any of the lenders are likely to look at such a proposal.
 
Pepper mortgages will allow the remortgage but you still have to show an ability to repay. As you are self-employed, you need to show 2 years accounts, so you will not be able to get a mortgage.


Steven
www.bluewaterfp.ie
 
Gordon Gekko said:
I would be shocked if the OP could get a mortage in the current environment.
Click to expand...

I understand why you say that.

However with more than adequate security, a loan of €120k with assets of €660k (€120k + €500k + €40k) gives a LTV of less than 20%.

and

More than ample repayment capacity. Repayments on €120k over 25 years would be about €600 per month (KBC Current Account Offer). With an income of €2,500 per month the poster any bank should welcome this business.

The stupidity and under-regulation of banks caused the bust in the past, the stupidity and over-regulation of banks is contributing to the current housing issues.
 
I don't disagree.

I made no comment regarding whether the OP should get a mortgage.

However, my view is that he/she would not get a mortgage.

To state the obvious, €2,500 per month is a gross figure, from which costs must be deducted. In addition, most banks assume a fallow month or two months every year.
 
A proportion of rental income would be taken into account but usually as a second income and not the principal one, this would have been common even back in the good old days. These days I doubt rental alone would be enough for a bank to take a chance on.
 
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