Charging Boyfriend Rent...

vanpiggy

This has probably been asked before but I couldn't see- sorry if it has, please redirect me to that post! I live with my boyfriend of 5 years, and I am keen to buy, though he isn't ready yet and would prefer to continue renting. That said he's as happy with the idea of paying me rent as he is paying our current landlord.

I've found some houses that I would like to buy, and I have a deposit that according to mortgage calculators would allow me to get an mortgage by myself though not at a great rate, and only tracker mortgages.

If I have a contract in place for my boyfriend to pay me rent as a tenant, can I declare this as income and use it in mortage negotiations? Or would I need to get a buy to let mortgage even if we live together?

Confused. Advice, specific and general, is greatly appreciated.

poppysarah

Committ to house or committ to you?

Have you a deposit saved yet? No? Then it's all just talk. Save up.
Yes. Then can you afford a mortgage on your own?

evoke

Jeez.

You are just trying to play the system and it won't work. Do things properly.

Jowo_2

vanpiggy wrote: »

... Or would I need to get a buy to let mortgage even if we live together?

The owner lives elsewhere - that's why it's a 'buy to let' (to other tenants...).

vanpiggy

Commit to the house :-) I have a deposit saved, like I say I can get a mortgage by myself and pay the mortgage but could get a better deal if I counted the rent that he would pay me as income- which it would be. No attempt to play the system there, I just wanted to know whether it was legal to do that before hand or whether I would need any special mortgage arrangements, in short to do things properly.

richiehp

I am no expert, but as you are not married, you could just treat your boyfriend as a tenant sharing the house with you, and then you could declare his rent as income.

vanpiggy

Hello Richie, thanks for that. That's the kind of thing I was wondering. I'm keen to do it properly so that if along the line we decided to part ways it is all done properly and the property is mine. If we stay together then we have saved money and we can legally make sure that he has some stake in the house.

Do you think that if I have a written agreement in place I could count this rent as an agreed income minus any tax in a mortgage interview?

Emmzi

he would not be a tennant he would be a lodger

but he wouldn't be guaranteed income - would you throw him out and get a new lodger if he lost his job for example?

generlly it is the percentage deposit that makes mortgage interet lower, not more income - that increases the total amount you can borrow. So I am a bit confused why you think this will get you a better deal unless you have an unusual product in mind.

Jowo_2

He wouldn't be a tenant (they have exclusive use of the property and the landlord lives elsewhere), the boyfriend would be a lodger (also known as an excluded occupier) as the landlord and lodger live in the same property and share amenities.

I'm not sure if a conventional mortgage lender would entertain the risk of lending extra money to someone based on a lodger's contribution to their income. If they don't pay their rent, or there is a long void period, then the home owner will struggle to pay the mortgage. Rents can plummet. It would encourage people to lie in order to get a higher loan.

There's a mention of this practice, saying some lenders will consider it for the purposes of a re-mortgage which won't help the OP anyway.

http://www.timesonline.co.uk/tol/money/property_and_mortgages/article5988254.ece

redped

Surely the mortgage company will want to see proof of your income? If you tell them that part of it is coming from your salary (and can show recent payslips) they'll want to know where the other part is coming from. Are you planning on telling them your boyfriend will be subsidising the mortgage?

It all seems a bit strange - you'd be better trying to persuade him to be part of a joint mortgage with you.

Jowo_2

Perhaps there are mortgage companies that will lend extra where it is clear the person taking the loan will have a spare bedroom, I don't know whether lenders have operated this type of thing.

But it doesn't seem to fit very well with the higher attention to risk these days in mortgage lending - saying a boyfriend will pay rent in the future is a bit like saying to the lender 'and my salary will go up by x in the future'. It's not actual income at the time of application.