mortgage query...letting
mortgage query...letting
Author
Discussion

ScuttleRX

Original Poster:

241 posts

226 months

Friday 19th September 2008
quotequote all
Renting out your home without switching to a buy-to-let mortgage, any nasty downsides?

ScuttleRX

Original Poster:

241 posts

226 months

Friday 19th September 2008
quotequote all
nice...not a route best taken then. Though to satisfy my curiosity, why only potentially, what other courses of action might the bank take?

grumbledoak

32,571 posts

263 months

Friday 19th September 2008
quotequote all
Do you have a mortgage? That rather thick bunch of paper? Did you read it? All those boring "terms" and "conditions"...

ScuttleRX

Original Poster:

241 posts

226 months

Friday 19th September 2008
quotequote all
well, yes, but I dont have it with me...do you bring yours to work?

Just asking a question FFS...

grumbledoak

32,571 posts

263 months

Friday 19th September 2008
quotequote all
No, I don't carry it around with me! hehe

But, if you have a mortgage, it isn't even your house yet. You can live in it, but anything else is up to those "terms" and "conditions". And they almost certainly don't allow you to rent it out.

Granted, this depends on them finding out (and we won't 'dob you in', here!) but 'they' really do have the right to sling you out! It ain't yours, yet.

ScuttleRX

Original Poster:

241 posts

226 months

Friday 19th September 2008
quotequote all
Cool, cheers matey, just bouncing around a few options due to a recent change in circumstance...thats one to strike off the list.

I asked because I do know a couple of people who are doing it, just curious of the consequences.

Stigmundfreud

22,454 posts

240 months

Friday 19th September 2008
quotequote all
interesting thread as the other half might be moving in with me so she will be in a similar situation

grumbledoak

32,571 posts

263 months

Friday 19th September 2008
quotequote all
ScuttleRX said:
Cool, cheers matey, just bouncing around a few options due to a recent change in circumstance...thats one to strike off the list.

I asked because I do know a couple of people who are doing it, just curious of the consequences.
Well, 'dob one in' and see what happens! hehe (not really)

People do get away with it, but that isn't the same as being allowed to do it. Playing Landlord on a residential mortgage is a great game. Until you get found out. You really don't own that house, yet. Inevitably there are a whole bunch of rules about turfing people out on to the street...

ScuttleRX

Original Poster:

241 posts

226 months

Friday 19th September 2008
quotequote all
Stigmundfreud said:
interesting thread as the other half might be moving in with me so she will be in a similar situation
Im facing the opposite situation and not too keen on trying to sell at the moment (although its looking like the only option)! My equity is in the high 80's and rising fast no doubt so dont think id be able to switch to a buy-to-let, hence the thread...

Lol, yeah i'll save the dobbing in idea for when im reeeally curious smile

ScuttleRX

Original Poster:

241 posts

226 months

snotsnfarts

237 posts

259 months

Friday 19th September 2008
quotequote all
Lots of Owners have done it, I phoned my Mortgage company up to be advised )reading between the lines) to keep up with the payments and get it insured, I found two good insurers Alan Boswells or HFIS who gave me very good qoutes.

fatboy b

9,665 posts

246 months

Friday 19th September 2008
quotequote all
Try calling your mortgage company. We did with our flat, and they agreed we could rent for a year on the current mortgage. After a year we called again, and they said just carry on as you are.

touching cloth

11,706 posts

269 months

Friday 19th September 2008
quotequote all
Switched a residential to a btl a few years ago, just rang them up and notified them, they didn't even load the rate. i had had it a few years as residential which probably helped, if i was just doing it a few months after buying i suspect they would have been less happy. Worth a call certainly.

SplatSpeed

7,491 posts

281 months

Friday 19th September 2008
quotequote all
Stigmundfreud said:
interesting thread as the other half might be moving in with me so she will be in a similar situation
he renting out his place in thailand??

Eric Mc

125,770 posts

295 months

Friday 19th September 2008
quotequote all
If you rent out your property, you will need to start making Self Assessment tax returns - if you don't complete them already.

ScuttleRX

Original Poster:

241 posts

226 months

Friday 19th September 2008
quotequote all
Thanks guys, I shall give them a call, had the house 4 years in April now. Reckon it'll be rented longer than a year though, what the best guess for 2007-ish prices...2012? (I haven't had enough time to wade through the house price threads as of late smile ).

Selling might be an option, quite handily the neighbour's house is up for sale so can see how he fares, had a 10k price drop recently but if he gets near asking price it could be worthwhile.

ScuttleRX

Original Poster:

241 posts

226 months

Friday 19th September 2008
quotequote all
Eric Mc said:
If you rent out your property, you will need to start making Self Assessment tax returns - if you don't complete them already.
ah ta, I dont complete them at the mo, im guessing they're a joy..smile!

I may aswell ask my other query as letting is now looking a possibility, do I have to pay any tax if the rental income is less than the mortgage?

scotal

8,751 posts

309 months

Friday 19th September 2008
quotequote all
First thing, have a chat with your lender and see what they say. If they say no, they mean it, and in the event they find out, they could give you a bit of a slap rate wise. "Yes Mr Scuttle we have added 1% to your interest payments." That sort of thing. Alternatively they might be absolutely fine.

Whatever you do, inform your insurance company. The policy will be void if the house is let without their knowledge.


ScuttleRX

Original Poster:

241 posts

226 months

Friday 19th September 2008
quotequote all
Thanks guys, some top tips for a letting virgin smile

Now thats sorted, why wont girls go out with me...I have a mondeo?

touching cloth

11,706 posts

269 months

Friday 19th September 2008
quotequote all
ScuttleRX said:
do I have to pay any tax if the rental income is less than the mortgage?
It's the interest element that is important not what you pay total, if you are on interest only for instance then yes 100% of the mortgage can be set off against tax, if not then you need to establish what element is the interest and just offset that bit. There are other factors that you can offset as well such as running repairs (although not improvements), agent fees, depreciation on furnishings if letting furnished. Also you need to be aware of capital gains tax liabilities when you sell, as you have lived there till now, you basically get another 3 years as CGT free, after that you start accruing a taxable charge on any increase in value, currently this you are looking at a flat rate of 18% on that.