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Hi Mortgage Brokers,
My son has one rental property that he has owned for a year outright, with no mortgage.
He is a PhD student and his only income is the rental from this one and the stipend for his studies.
He's possibly interested in remortgaging the property to buy one or two more, but I'm wondering how he'd stand with lenders in his circumstances, or whether I could be a guarantor. Do guarantor mortgages exist in buy-to-let?
Author of The Complete Guide to Property Strategies and The Complete Guide to Property Investing SuccessLearn more at http://www.completepropertysuccess.co.uk
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"It is the small decisions you and I make every day that shape our destiny" Anthony Robbins
There are two other factors that quickly spring to mind; does he own the house he lives in, and - albeit he has owned the house for a year - how long has he been renting his property out?
Whether he lives in a house he owns or not, that's not a problem as I have lenders who will say yes to either answer. The rent calculation is now stressed more so than ever so he can only, of course, release so much in order to reinvest.
Finally, how long he has been renting out his property will determine which lenders consider him to be an 'experienced' landlord and therefore whether the lenders will require an additional income stream from him, or not.
As always, we need a full Fact Find completed before we can categorically say that he is eligible for any mortgage, and that would include credit checks, and a review of his other assets, liabilities and expenditure etc etc.
Hope that helps.
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Hope things are well.
It's not easy given the income situation - "no minimum income" is not as it sounds.
Lender still requires evidence that your son will still be able to maintain his lifestyle & cover void periods if tenant fails to pay rent.Given his income source is the rental he wants to remortgage that can become difficult. Then PTFS above raises some good questions about home ownership (which may limit options)
Though all it not lost - your title does say "Guarantor" and that is an option. We do have some lenders that allow you to be a Guarantor of the mortgage or as a "Joint Borrower" (as an alternative to joint owner).This means those above concerns about void periods could be set aside based on your income to cover such costs and back the loan.
Not many do this but as always we at Bespoke Finance would be happy to help on 01133203240 or email@example.com
_________________________________________________________________________My posts are not financial advice, just a rambling guy passing time on a coffee break.The team at Bespoke Finance offers advice, including Limited Company Buy-to-Let , HMO Conversion and Cheap Life Insurance._________________________________________________________________________
Thanks for the replies on this both. I'll discuss it further with my son and husband before getting in touch.
Just to answer a couple of points: this is the only property that my son owns. He rents (ie is a tenant) the place where he's living currently (not owned by us).
We manage the property he owns for him and have forwarded him the full rent amount from the very start of his ownership period (a year) with no deductions.
My income as I think you both have on record, is mainly from BTL also so hopefully that wouldn't be a problem as guarantor.
Thanks Angela - that's useful additional info. Yes, we have a lot on record already and so assisting your son would be fairly straightforward.
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Ok thank you. I'll let you know when my son is ready.