Getting a mortgage for your own home when you're a landlord
I'm looking to buy a house for my partner and I to live in and have just had a conversation with First Direct that shocked me.
My partner is salaried and I earn 90% of my income from my investment properties. They told me that even though our joint income would normally be enough to get a mortgage from them, they could not include any rental income when calculating our income and would treat the properties as though they were empty and producing zero income. Furthermore they would also calculate the costs I would incur if the properties were all empty (council tax, insurance, gas/electric etc) and deduct that amount from our income figure. This they say is because there is a chance that all the properties (26 of them!) could all become empty at there same time and so my income would be zero but I would still have the costs of owning these empty properties. They would not take into account that I've been a professional landlord for 30 years with healthy accounts and also with a very substantial amount of equity in my properties.
I asked them if they treat all self-employed people the same way, i.e. do plumbers and joiners etc also have their self-employed income discounted because they too could find themselves in a situation where they have no clients and therefore no income, but it seems it is only landlords that are penalised in this way.
I'm assuming that not all banks and building societies have this prejudice against landlords, but before I waste several hours going through the list of lenders I wondered if any landlords have had experience of dealing with a lender who looks favourably at rental income rather than discount it as First Direct appear to do?
It's ironic that my inbox receives daily emails offering landlord finance to purchase investment properties, but when finance is needed to buy a home it appears to be more difficult.
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