Not Sure what to do

gary_pacha

First time buyer, completing, end of April – middle of May. I have a mate moving in for a few months, after that I am not sure to rent it out or move in myself. However I was wondering, could any body advise me on what mortgage to go for. Would you recommend a mortgage with a low introductory rate, where, I could make a bit of money, from the difference between the repayment and the rent, which I may use to reduce debit. Or put aside for another deposit.

The Value of the apartment is 120000, paid deposit of 6000, so i think i need a mortage for 114000

homer_j_3

If you intend to rent the whole property out then you will need to either get a buy to let (BTL) mortgage or inform your lender that you want to do this so they can protect themselves sufficiently. As you are a FTB and you have not completed on your mortgage, I am not sure that the lender will take to kindly to what you are trying to do but that will become apparent when you speak to them. I would also say that a 5% deposit is not usually enough to secure a BTL product.

If you intend to rent a room then you can do this no problems with a mortgage, you just need to get the person renting to sign a form to protect the mortgage company against squatters rights etc should reposession take place. You get a tax free allowance of approx £4k a year doing this but there cannot be any legal agreement in place such as a shorthold tannancy agreement.

If you rent outrightly you will have tax implications to consider.

With regards to what mortgage you should choose, I cannot say as I do not know your circumstances or aspirations etc. All I can say is - just because it looks the cheapest product based on lowest monthly payment, it doesnt mean it is the cheapest product as you have to compare all costs involved such as repayment charges, arrangement fees and whether it meets your aspirations.

I would recommend you seek advice from a broker to see what is the best for you and if you want to complete by end of april to do so quickly as it can take a while to get things done, especially if the lender doesnt get all the information required.