- 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.
