Rental Income

[samira_uk]

Hi,

I am a bit confused about the guidance on rental income.

it is said that the property should be owned by the sponsor and then said:

Equity in a property cannot be used to meet the financial requirement.

What does it mean? it means that the sponsor cannot rely on a mortgaged property and they should have paid off all debt? Or a rental income from a property with mortgage can be counted?

Thanks

[CR001]

Equity is NOT rental income. If their is equity in the property, it basically means it is worth more than the debt. You cannot use this to meet the financial requirements.

You can use rental income, provided it is enough and all obligations are met etc.

[seagul]

I think the concept of mortgage rental income is similar to loan money or third party support which HO prohibits to use in meeting financial requirements.

[samira_uk]

Equity is NOT rental income. If their is equity in the property, it basically means it is worth more than the debt. You cannot use this to meet the financial requirements.

You can use rental income, provided it is enough and all obligations are met etc.

Thank you but i am still confused. so we can use a rental income on a property with mortgage to meet the financial requirement? what do you mean by all obligations are met?

[samira_uk]

I think the concept of mortgage rental income is similar to loan money or third party support which HO prohibits to use in meeting financial requirements.

It is what made me confused but it seems that mortgage is not an issue as one of the evidences that HO accepts is Mortgage statement to show the ownership.

[seagul]

I think the concept of mortgage rental income is similar to loan money or third party support which HO prohibits to use in meeting financial requirements.

It is what made me confused but it seems that mortgage is not an issue as one of the evidences that HO accepts is Mortgage statement to show the ownership.

I think to meet accomodation requirement it should work but for meeting financial requirement like mortgage rental income then it may fall.