Should we sell up or rent

[coochie]

Hi, looking for some advice, currently have owe 175K on a tracker, apartment in approx 30k negative equity, we have 45K in savings, no other loans, have been given the opportunity to buy a house from a relative for 150K, however if we sell apartment between EA fees, sol fees, management fees and neg equity it could be all our savings gone. My question is do you think a bank would lend us 100K and we could rent the apartment out, my salary is 35K partner is self employed, he had no work most of last year so had to seek JB but he has now signed off and now has the capacity to earn 40K

 

[fizzelina]

Hi Coochie. the bank will not take the rental income into account when they calculate whether you qualify for a new mortgage, so basically that means you need to be able to show that you could both mortgages off your salary. This would be hard to meet on 35k and your partner's salary is only speculative at the moment, he's got capacity to earn it. Also it is harder to get a mortgage when you are in neg equity.