Permission to let and another residential

nixxystupot

Hi

In a nutshell I have had consent to let on my existing property and am in the process of buying another with my partner.

My questions are:

Once my deal has finished that I'm in currently will my permission to let have To go onto a btl or can I fix into another residential deal?

Secondly once my new property that I'm moving Into and the deal on that has ended (locked in for 2 years fixed) will other lenders be happy to lend me and my partner the money whatever deal may be available at the time?

I don't want to be left in a position where me and my partner a) cannot get the money lent to us and 2) get a really rubbish rate because I have a permission to let already.


Help and advice appreciated

Nix

amnblog

Permission to let is a temporary solutions to a frequently encountered problem of the homeowner needing to live elsewhere for a short period.

It is not an alternative to buy to let.

Most lenders, if they think you are letting permanently would want you to take a but to let mortgage.

The only advantage you have is that lenders are not very good at reviewing mortgages once they are running.

The Lender on your new property will most likely want to see evidence that the current property is on a permission to let and that the rent exceeds the mortgage payment by 125%

nixxystupot

Ok well I will call my lender and confirm exactly what would happen once my deal ends and look at BTL products etc.


How would I prove this when the time comes to remortgage - via bank statements and tax returns? I won't be making a profit on this whatsoever as I was only planning to charge what my mortgage repayment is.

amnblog

The mortgage repayment they can normally see on the credit file. they will ask for a copy of your tenancy agreement and or your bank statements to evidence the rent.

Thrugelmir

nixxystupot wrote: »

How would I prove this when the time comes to remortgage - via bank statements and tax returns? I won't be making a profit on this whatsoever as I was only planning to charge what my mortgage repayment is.

The property will still require maintenance and upkeep. That's your responsibility as the Landlord. Also the property will incur natural wear and tear.

Only the interest element of the mortgage repayment is tax deductible.

Finally remember to allow for void periods an tenants who don't pay.

Being a LL is far more than just sitting back and collecting rent cheques. It's just like running a business.

nixxystupot

Thank you.

Will i still need to pay tax on the interest of the mortgage repayments even though I'm not making any profit on the property?

If this is the case how can i work out how much i am likely to be paying?

Thanks again

amnblog

there is a potential to have a tax bill on the profit you make on the rental yes.