Buying a second home with 'income' based on rent...

andyward82

Hi. I own a house. My girlfriend owns a house. Both of our separate mortgages can be paid by rent (hers already is). We're thinking of buying a house together whilst keeping our current homes out for rent and being paid for.

Obviously house prices are very low at the moment and look like they might start crawling up soon so we thought it might be a nice good time to get one together.

The main thing I need to ask is - do the mortgage companies take into account rent as an 'income' and effectively wipe out my current mortgage as an ingoing/outgoing? I can't afford to have two mortgages but the first one shouldn't need to be taken into account seeing as it'll be paid by regular rent payments.

Another note, I'm thinking of renting it to my mum. So, in actual fact I could put it down on the mortgage application (for the new house) as 'Other income from rent' and simply declare that I already have a house.

My girlfriend and I would be getting a joint mortgage and both our credit records are impeccable.

What are my options?

Soot2006

do the mortgage companies take into account rent as an 'income'

Of course, as long as it's declared as income!
I think you'll have to do a self-assessment thingy and they'll want to see the tax returns or something like that

clutton_2

"" I can't afford to have two mortgages"2

then what will you do if you cannot get a good tenant quickly, or if the tenant stops paying rent

neas

I love the 'very low' bit./

Houses are very high at the moment 10 years ago they were 1/3 of the price they are today!.

You sir need to do more homework lolz .

Mini_Bear

utterly agree with neas. house prices are not low at the moment. they are returning to a more sustainable/affordable level.
they may stay there for decades.
OP are you are declaring the rental income to HMRC on both properties? u would be taxed on the full rent (less the interest charge).
You may well come a cropper when the new laws are set out detailing that all landlords must be registered and this will be monitored by HMRC to ensure tax is paid on all income.