What Type of Mortgage?

BulletCraig · 21 May 2014 at 10:28PM

Hopefully someone can help here. I'm looking to buy a property on my own, but two friends have said they would move in and pay rent. It would make sense financially for us all so it's definitely something I want to look into. I've been trying to find out what this falls under but can't seem to find a definitive answer. I don't think it's a buy-to-let mortgage (and hope it's not since I wouldn't get one as I'm a first time buyer) since it would be my home too, but everything I've read seems to say you can't accept tenants under a normal mortgage. Is there a specific type of mortgage that would deal with this?

Thanks.

Foxy-Stoat_3 · 22 May 2014 at 12:04AM

Normal mortgage. They wont be tenants, they will be lodgers, world of difference. You can't have more than 2 lodgers though without hitting mutli occupation issues.

You will have to inform your lender, but i would keep quiet until you actually complete, and declare the earnings to HMRC and pay some tax.

BulletCraig · 22 May 2014 at 8:17AM

Ahh perfect! And the lender will be OK with it? They can't reject me having lodgers?

One of the friends receives housing benefit - will that still be OK? Would I have to register as a landlord?

Apologies for all the questions, like I say I really struggled to find information on this. Though now that I know they're lodgers I'll be having another look.

Foxy-Stoat_3 · 22 May 2014 at 9:14AM

I wouldn't mention it to the lender until they are in, as long as you can afford the mortgage then its all good. Double check the application form for these types of questions and confirm at a later date.

Not sure how the housing benefit works for lodgers so can't answer that....up to your friend to sort that really. |All your worried about is getting the rent EVERY WEEK, if they are claiming benefits then this may cause issues, maybe ask another friend?