Renting out my house

sinclasc

Hi,
I'm in a bit of difficulty financially (no money to pay mortgage - can't sell house) and am wondering if letting it out is a viable option to pay the mortgage in the short term.

Key questions: How much "tax" or such do I have to pay? Are there any hidden extras? Can I still rent it out even though it's mortgaged?

Thanks in advance.

jaype

You'd have to tell your lender its now a buy to let and they may charge you a higher mortgage rate. I can't tell you about capital gains tax, but you'd have to look into that.

Wings

Yes you can let your mortgaged house, but first contact your mortgage provider and then your house insurers. Interest you pay on the motgage can then be deducted from the gross pofits/rent you receive, together with other expenses you incure.

thesaint

Where do you intend living while you rent your house out?

sinclasc

I'd live with my parents for a while.

Topsy1_2

Its not just a question of "telling" your mortgage providers, you have to ask permission and wait until you receive it before you can start; however, they may indeed try and charge you a higher rate. Also, with house insurance, unless you're letting it furnished, you can reduce the amount of contents insurance you pay.
Hidden extras? well, things like annual gas safety check and an initial electrical check, (unless you're covered by a NHBC 10 guarantee?); if you go through an agent, there'll be agents letting and/or management fees. Also, tenants seem to move in and things will start to go wrong in the house that never went wrong before...

Nenen

Would it be possible to take in one or two lodgers instead? That way you can stay in the house and not have to get a higher rate mortgage. I'm not an expert but I seem to remember reading that you can take in a small number of lodgers without paying tax on the income (although DO check on that as I'm not sure).

seven-day-weekend

You can earn up to £4500 a year without paying tax if you have lodgers.