changing to buy to let

shornt

I have two properties, my main house which has a very small mortgage and I also have a flat which I rent out.
The flat has an LTV of approximately 50% I want to remortgage the flat to release some funds for improvements to my main house and to put things in order as I have been renting the flat for ten years and I have never informed the Halifax. I want to approach the Halifax to see what deal they could offer me but I am not sure what they will say about the fact I have never had permission to let or informed them that i am.
Has anyone ever been in a similar situation?

mhay_3

wow, i think your best bet is to approach them straight away, are you renting to a tennant or family member? i think if they ask questions just inform them it's been to a close family member who are now moving out. hope you've been declaring the income too!

MortgageMamma

Oh Dear, as Mhay says do you want to give us some more information? Who lives in the property etc etc. Why do you not want to remortgage your main house surely this would be easier?

shornt

Thanks for your replies.
I want to remortgage the rental property to fund improvements to my main house.
All the rental income has been declared to the taxman hence the reason I want to put the debt on the flat rather than my house because I don't have to pay tax on the mortgage interest on the flat.
I also haven't got long to go on the mortgage on my house so rather than continuing to commit myself to two loans I can just have the one loan on the rental property.

The flat has always been rented out via a rental agent to various tenants no family members.

Mr_helpful

why not remortgage it to a Buy to let and draw out what you want

shornt

yes but as I said in my original post.
"I want to approach the Halifax to see what deal they could offer me but I am not sure what they will say about the fact I have never had permission to let or informed them that i am."

Does anyone think or know how I should proceed with the Halifax as I have never told them I am renting the flat out?

toonfish

tell them you are going to let it out now, they won't know that you already have

regularsaver1

They don't lend more on rental though,l so you'd have to say that you want to borrow the money first

be prepared for an arrangement fee for the consent to lease

Polovski

Sorry to slightly hijack this but i have done something similar and it's starting to worry me.

I saw my dream house and couldn't sell my house in time so my mortgage adviser got me a mortgage on the new house based on our income and that we were going to let our existing property. We have let the old property now for 6 months to a friend for £500 a month, the mortgages on the property come to £542 a month as £138 of that was the remortgage i took to put a deposit on the new property. I'm not making any money (technically)on the property so should i declare it to the tax man?

I never told the existing lender (woolwich) that the house is let - they think i still live there, i don't know what to do and it's starting to worry me.

Any advice greatly appreciated - my main concern is that if i go to woolwich now they will twig that i have been letting it.

Again - sorry for hijacking the thread and cheers in advance.:beer:

shornt

The whole mortgage payment is not tax deductible, only the interest charged is. Payments that you are making which are reducing the debt are not tax deductible.

Although I haven't done it yet,:-( you should inform the lender, they will then give you permission to let usually for limited period (but they do charge) and if they are like my lender they will then want to review your mortgage if you wish to let the property over a longer term.

N.B just a thought, check your buildings insurance as well, make sure you are still adequately covered if you haven't told your lender.

Polovski

so would i be right in saying that the £398 repayment mortgage is not tax deductable but the £148 interest only part is?

I've got all the insurance stuff in front of me - i know i need to change it all over.

Just so worried at how much the change in mortgage is going to cost me as we are barely managing as it is. i only let the property for £500 a month so on paper i already make a loss on the property every month (but in fact the £148 repayment is what i funded the deposit on the new house with). Problem is that i am struggling to meet the repayments on the new property which is a further £648 a month.

I know how to get myself in a mess don't i!!!:eek: