Is it possible to get a 2nd mortgage on a 2nd house by renting out your first ?

Question

I have my first property which is a 3 bedroom house 2 bathrooms and a downstairs WC, All in all a pretty tasty property.
I reckon I could rent out the house for the same amount as the mortgage which is just under £600 however is on a variable rate so could increase.
Would it be possible if I rented out the property to take another mortgage?
As the house is paying for itself if it was rented out, I would have all my income that was originally used to calculate my original mortgage, so surely this means I can get lent the same ammount of money???

Answer 1

Actually post previous answers aren't quite right.

The short answer is yes, you can get a mortgage for the second house while renting out your first.

You likely will not qualify for as large of a loan as the first property (unless your income has gone way up or something).

The rent will be considered income but they won't just disregard the 1st mortgage if the rent is the same as the mortgage payment. You (and they) have no guarantee that it will be rented 100% of the time. It is probably reasonable to expect it to be rented out most of the time (12 of every 13 months - one year lease and a month to re-fill it?). They will most likely credit a large percentage of the income.

So now that you have an idea of how the bank will handle it, you still have a few questions to answer for yourself.

What will you do when the tenant calls you at 2am because ? (the heat's out, the toilet is leaking, etc.)

What will you do when the tenant doesn't pay rent?

How will you get tenants?

Can you afford the extra payment if the house sat empty for several months?

These are all factors. Consider them carefully. If you can handle those questions (and most likely more), then it is an excellent way to build wealth long term. Good luck!

Answer 2

Many lenders will not consider rental income in calculating your monthly income if you don't have a rental agreement or some proof of already recieving payments.

What you are asking is possible, in theory.

In the states there is some type of interim loan available to home owners who want to buy before their current property is sold, this would give you the opportunity to buy, move and secure a tenant [income] -- and then seek permanent financing for your old home.

Best wishes.

Answer 3

Very probable.
As to renting out for the note payments, are taxes included?
You may surely have maintainence and repairs.
You will have normal wear and tear by renters, painting, flooring, etc.
A profit should be realized on renting.