first time buyer - rent a room

aspire2707

Could i rent a room when having a first time buyer mortgage?
Could i change my mortgage to buy to let?
Will i have to pay more monthly?
Are there any other costs?
Will that be still buy to let if i will live in this property?

I checked T&C and i see that even if i want to build an extension i have to get the permission from bank - is this usuall?

Thank you

HappyMJ

Yes you can rent a room out without informing your lender.

Yes you can change your mortgage to a BTL if you qualify...and intend to move out.

Yes the interest rates on BTL mortgages are higher than owner occupied residential mortgages.

Yes you'll have to get gas safety certificates. I'm assuming you have an EPC already.

No you can't have a BTL mortgage if you live in the property you must rent it out and live elsewhere.

You need to inform your bank if you're going to do something that could alter the value of the security that you have secured against the mortgage. Building an extension usually adds value so if you've got the money then ask your bank. They might require you to ensure the builder has insurance and I would advise you do that in any case.

G_M

aspire2707 wrote: »

Could i rent a room when having a first time buyer mortgage? Yes
Could i change my mortgage to buy to let? Depends on your mortgage product, but probably, provided you pass the criteria
Will i have to pay more monthly? which? Rent a room: no. BTL: yes
Are there any other costs? Cost of letting? Many. Costs for renting a room?minimal
Will that be still buy to let if i will live in this property? No.

I checked T&C and i see that even if i want to build an extension i have to get the permission from bank - is this usuall?
Yes. And if a leasehold property you'll need freeholder permission too

Thank you

LODGERS (Licencees/Excluded Occupiers)
A lodger (broadly) lives in the same property with their resident landlord, and shares facilities. Unlike tenants, lodgers have few rights.

The Housing Act 1988 provides definitions of 'Resident Landlord' and 'same property' (S31 & Schedule 1 (10).

There is advice for landlords considering taking in lodgers here:

LodgerLandlord (21 tips from solicitor Tessa Shepperson + General information site)

Landlordzone (Various articles on taking in lodgers)

Renting out rooms in your home (Government info)

Rent a Room Scheme (Government scheme for tax-free income from lodgers)






* New landlords: advice, information & links

booksurr

yes you can have a lodger but the lender is unlikely to take account of the rental income when working out your affordability and deciding how much you can borrow

everything else is as per Happy's answer

aspire2707

HappyMJ wrote: »

Yes you can rent a room out without informing your lender.

Yes you can change your mortgage to a BTL if you qualify...and intend to move out.

Yes the interest rates on BTL mortgages are higher than owner occupied residential mortgages.

Yes you'll have to get gas safety certificates. I'm assuming you have an EPC already.

No you can't have a BTL mortgage if you live in the property you must rent it out and live elsewhere.

You need to inform your bank if you're going to do something that could alter the value of the security that you have secured against the mortgage. Building an extension usually adds value so if you've got the money then ask your bank. They might require you to ensure the builder has insurance and I would advise you do that in any case.

what if it says in T&C that i should not make any legal contracts with third parties about occupying the property?

is that for sure if i will live in this house i can rent out?
i wouldn`t mind paying few quid more and sleep well...

aspire2707

booksurr wrote: »

yes you can have a lodger but the lender is unlikely to take account of the rental income when working out your affordability and deciding how much you can borrow

everything else is as per Happy's answer

i have my mortgage allready done - waiting to exchange
just wanted to be sure i don`t have to change for buy to let if i want to rent 1-2 rooms
i notified bank that only my wife and sister will go with me, then i will take 2 other people i live with in current rented house

thanks for all your answers:)

HappyMJ

aspire2707 wrote: »

what if it says in T&C that i should not make any legal contracts with third parties about occupying the property?

is that for sure if i will live in this house i can rent out?
i wouldn`t mind paying few quid more and sleep well...

They really mean assured shorthold tenancies. Getting a lodger doesn't count. You can kick a lodger out with no notice whatsoever if you really wanted to. If you do get a lodger don't create a contract just write down and verbally agree the house rules.

gazter

aspire2707 wrote: »

i have my mortgage allready done - waiting to exchange
just wanted to be sure i don`t have to change for buy to let if i want to rent 1-2 rooms
i notified bank that only my wife and sister will go with me, then i will take 2 other people i live with in current rented house

thanks for all your answers:)

The bank is only really concerned in the case that a third party will be able to acquire an interest in the property that makes repossession difficult, either because they have a tenancy or have contributed to the mortgage.

Keep it simple and honest.

G_M

HappyMJ wrote: »

If you do get a lodger don't create a contract just write down and verbally agree the house rules.

:huh:

That would be a contract (assuming it is in exchange for rent)!

Nothing wrong with that though. You need a contract. Just make sure you don't create a tenancy agreement.

kingstreet

Some lenders require the borrower to disclose any change of occupancy, including taking in a lodger not just total letting of the property.

If a lodger is going to be resident in the property from completion, they should have been disclosed and a consent to mortgage form completed in advance of completion.