Key issue:
Calculation of borrowing capacity
Case study:
General Guidelines
Date:
2004-07-04
Mortgage amount:
General

Outcome

Borrowing capacity is primarily dependent on income .

Detail

Lenders will look at the investment property in isolation ,take a % of normal rental income ,set against this the monthly repayments and this in turn will generally come up with a shortfall.Lenders will then assess whether your income is sufficent to meet this shortfall along with other outgoings using 35% of net income as a guide to maximum borrowing capacity.

 
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