Capital own home possible rent impact on ESA (IR) PIP HB Ct

Janetta

Thank you Teabag & NYM

Topcat1982

Janetta wrote: »

Hello girlfromars,

Hiya, huge mortgage no capital, interest only payments are £400 per month - with rental at £700 per month - there would still be shortage of £ 200 .... Loss to myself.
That's why I am trying to get there response interpreted ... Thanks

Doesn't that mean there would be a profit of £300, not a loss of £200?

Studebacher_Hoch

Janetta wrote: »

Hello Studebacher Hoch,
Thank you for this .
Can you simplify what you wrote for me ? Is it a yes or no.
thank you

Not sure if the pm sent, but if the rent is less than the cost of your mortgage then you're fine (as long as you're still planning on selling the house).

I would still get it confirmed with ESA though - ask them to confirm in writing that Regulation 23 (2) of Schedule 8 of the ESA Regs applies and that as the rent income would be less than your mortgage costs it should be disregarded as income.

(The regulations are boring, but they have to go by the law so it helps to point out exactly which one applies to avoid mistakes.)

Janetta

Hello Topcat,
Monthly mortgage payments are £900 approx per month
Interest only was £ 400
With potential rental at £700 per month
Cheers

Janetta

Hello Studebacher Hoch,
Thank you so much tried to PM you unsure if you got it.
They are aware a housing association wants to rent with a full repairing & insuring lease for two years ... Would I still have to keep it up for sale ?
I am aware i have to inform HMRC which is a whole new ball game ?
I have been unable to find anyone whose actually done this ? Thanks again

NYM

Janetta, please, please ensure you let your mortgage company know your plans on letting the property because you must have their consent. If they find out you've let it, they could call-in the mortgage, force a sale, auction it off for far less than it's worth and you'll still end up owing on any shortfall. You really wouldn't want that to happen !

Is there any particular reason why it isn't selling ?

Janetta

Yes aware mortagage company approval is a must ?

The reason it's not selling - decorative, updating needs to be done - two offers fell through, really large house costly, heating system central heating needs a overall.. and been up for sale for nearly three years. Constant price drops its often questioned why ( buyers suspicious)

On the plus side desirable location -

densol_2

You can ONLY count the interest on the mortgage - not the whole payment - so you are in PROFIT by £300 per month ( £700 - £400 = £300 gross profit )

FBaby

So to get it right, you can get HB ONLY if you are showing efforts to sale the property and the 26 weeks delayed only if you continue to the above, but you intend to rent for 2 years whilst still on th market?

For one, this is going to put off any good tenants. They won't want people coming into their house to look around. They also won't want the insecurity that their tenancy will mot likely be short term (unless you are lucky to find someone who is looking for an in-between purchases). You say that the house needs much decoration, so again, you are reducing your chances of getting good tenants.

Do you realise that being a landlord is demanding and can be costly? It is a business and you need cash to support it. What will happen if the boiler breaks down and you have to replace it? You'll need building insurance to start with.

Housing_Benefit_Officer

densol wrote: »

You can ONLY count the interest on the mortgage - not the whole payment - so you are in PROFIT by £300 per month ( £700 - £400 = £300 gross profit )

No you count the whole mortgage payment for benefits purposes.

For tax return purposes it is the interest only.