Mortgage help please - buy to let - further advance

darrenkellum

Hi,

I have a house with my brother which we bought from our parents. Luckily they sold it to us cheap so we have some equity in the house to use.

We currently have a repayment mortgage (was 2yrs fixed now fallen to variable rate as term has finished) with Halifax

By September we would like to

- Further advance on current mortgage to each take out some for putting down deposits on next places that we want to buy with partners.

- Rent out current property to students.

Questions.

-Should I move to a buy to let mortgage (or Consent to Lease as Halifax call it) and incorporate the further advance?

-Should I just further advance (using a new product) and stay on the variable rate for ther other main part of the mortgage.

-Is there anything illegal with renting out on a standard mortgage (not buy to let)

-If buy to let - what taxes do I pay? Im guessing I need to factor this into rent to cover the mortage payments + taxes.


Thanks
Darren

silvercar

-If buy to let - what taxes do I pay? Im guessing I need to factor this into rent to cover the mortage payments + taxes.

The interest you pay on the mortgage is an expense against the rental income. So you should find that you won't pay much tax.

-Should I move to a buy to let mortgage (or Consent to Lease as Halifax call it) and incorporate the further advance?

-Should I just further advance (using a new product) and stay on the variable rate for ther other main part of the mortgage.

The banks have a reluctance to release money on BTL mortgages for further property investment at the moment (according to some posters on here). So you would have more chance of success if you increased the mortgage size while you still lived in the property and then applied to the Halifax for consent to let. If Halifax won't agree you will need to consider remortgaging elsewhere. It would be worth inquiring of Halifax's policy without giving your name.

Straight forward BTL mortgages are based on your rental income, so you need to ensure that the rental income will cover the mortgage payments.

darrenkellum

Thank you for your response.

Am I correct then that I can legally rent out my property while neither myself or my brother live there, without having a buy to let mortgage arrangement? Ie. the tenants pay me, and I pay my normal mortgage.

socrates

darrenkellum wrote: »

Thank you for your response.

Am I correct then that I can legally rent out my property while neither myself or my brother live there, without having a buy to let mortgage arrangement? Ie. the tenants pay me, and I pay my normal mortgage.

No you CANNOT legally do so.

You either get consent to let or refinance to another lender.

Best to get the refinance as previously advised whilst still living there - as long as your income can support this extra borrowing.

darrenkellum

Thank you again,

Hopefully last question.

Would you say it is better to further advance with our current lender Halifax. Then swap our mortgage to the consent to lease with them them.

or

Re-mortgage to a BUY TO LET with another lender and at the same time pull out the extra.

Or something else.


Thanks again

socrates

darrenkellum wrote: »

Thank you again,

Hopefully last question.

Would you say it is better to further advance with our current lender Halifax. Then swap our mortgage to the consent to lease with them them.

or

Re-mortgage to a BUY TO LET with another lender and at the same time pull out the extra.

Or something else.


Thanks again

The first one like you have been advised 3 times now