Second Mortgage

JasonHand

Hi,

I currently of an outstanding mortgage of 68k and my property is valued at around £110k.

I'm thinking of trying to get a 2nd mortgage for another property.

Now I currently have 2 lodgers in my current property and have the potential for a 3rd. If I was to get a third lodger this was easily cover my mortgage payments per month on this house. In fairness my current rent pretty much covers the mortgage payments and I'm being pretty generous with what I'm charging anyway

The property I have in mind is actually only valued at 80k.

So what is my best way of approaching this? Should I just speak to my current mortgage holder? Can I use an equity in my current property to fund the 2nd house? And what would I need to do my current mortgage if I was to rent the house out? And is this rent I receive taxable?

So a few questions, some which might sound really silly to the experts out there.

Many Thanks
Jason

getmore4less

Deposit how much do you have?

Have you looked at the tax and HMO situation with multiple lodgers?

The lodger rent is taxable.

antrobus

getmore4less wrote: »

....The lodger rent is taxable.

On the assumption that the reference to 'lodger' means that the OP lives in the property, the rent may well be covered by the rent-a-room scheme, and thus tax free.

JasonHand

Hi,

Thankyou for your replies, its much appreciated.

I currently have a 5k deposit, now do I still need the full 10% deposit which most banks/building societies require? Obviously at the moment I would be a bit light.

Yes at the moment I do live in the property so my understanding is the rent from my lodger should be tax free.

I'm a little unsure of the tax side of things really. If I was to rent my house out and I wasn't living there and I was renting out for £450 is that then taxable? Does it matter how much I earn in regards to my employment?

Thrugelmir

antrobus wrote: »

On the assumption that the reference to 'lodger' means that the OP lives in the property, the rent may well be covered by the rent-a-room scheme, and thus tax free.

2 lodgers already so the annual allowance may have been exceeded.