Loan vs Renting my House

catmac00

So i have purchased a property (4 months ago) that I am living in and have informed my bank of this.

I haven't got round to changing my Electoral Roll as yet and now I have been offered a job abroad (Australia).

I want to get a loan out to cover some expenses prior to this but I am confused on a number of things:

- If I am leaving this property and renting it out, is there any point in going on the electoral roll - i am still listed as living at my parents?
- If I need to get a loan do i need to be showing as living in my flat (as opposed to my parents) as my bank address is different?

I don't know if ill just get rejected for a loan as my bank and electoral roll are showing two different addresses? At the same time, i will be leaving the flat within the next 6 months, so it will be harmful to my credit score if I show two address moves within 6 months.

Im awfully confused as to what to do, so any guidance welcome!!

Thanks

Arleen

What may be most important to you is that electoral roll is not something that is updated often, and on the same token CRAs also update it only now and then (at least once after the annual canvass is conducted in December). So showing your previous account on electoral roll, while having new one on bank accounts it not a big deal, as long as you have 3+ years of previous address history there.

So while you should have updated your electoral roll right away, if you are about to move out there is little reason to do so now. It won't be updated in time anyway.

Pixie5740

I doubt it will make much difference to you changing your address with the electoral register now. The change might not update before you apply for a loan.

Is your mortgage lender aware that you shall be renting the property out so soon after purchasing it?

Who will manage the property whilst you are living on the other side of the world?

Will the tenant have to deduct the income tax for you?

See New Landlords: Advice & Information for new landlords as well as Letting Agents: How should a landlord select/sack.

Then there's HMRC's manual for The Non-Resident Landlord Scheme and I have no idea if or how the Australian government will tax your rental income.

catmac00

Pixie5740 wrote: »

I doubt it will make much difference to you changing your address with the electoral register now. The change might not update before you apply for a loan.

Is your mortgage lender aware that you shall be renting the property out so soon after purchasing it?

Who will manage the property whilst you are living on the other side of the world?

Will the tenant have to deduct the income tax for you?

See New Landlords: Advice & Information for new landlords as well as Letting Agents: How should a landlord select/sack.

Then there's HMRC's manual for The Non-Resident Landlord Scheme and I have no idea if or how the Australian government will tax your rental income.

Thank you for your reply! I will be informing my mortgage company but until I have this sorted (accepted) I dont want to change any details. I will be using a letting agent (fully managed) should I choose to do this.

With regards to income on the rental - I wont be charging enough to make money on it - the rent will cover the mortgage? Do i need to do anything further if this is the case?

Thanks

jonesMUFCforever

What do you mean by ''informing my mortgage company''?

You do know that you need permission to rent your home out?
They might make it difficult for you if they think you misled them in the application process - between a home to live in or a buy to let (as it seems to be heading now).

Pixie5740

catmac00 wrote: »

Thank you for your reply! I will be informing my mortgage company but until I have this sorted (accepted) I dont want to change any details. I will be using a letting agent (fully managed) should I choose to do this.

With regards to income on the rental - I wont be charging enough to make money on it - the rent will cover the mortgage? Do i need to do anything further if this is the case?

Thanks

You don't inform your mortgage lender. You request consent to let from them and they may or may not grant it. If they do agree it won't be forever.

It's only the mortgage interest that's a tax deductible expense not the capital repayments. Even if you only charge enough rent to cover the mortgage you could still be making a profit.

AnotherJoe

catmac00 wrote: »

With regards to income on the rental - I wont be charging enough to make money on it - the rent will cover the mortgage? Do i need to do anything further if this is the case?

Thanks

You need to inform HMRC even if you make a loss. (ISTR there's a low end limit on rent charged where you don't have to inform them. But note it's on rent charged, profit is immaterial )

klaus00

Renting your house? Not an option

glennevis

There is no low end limit for informing HMRC if you have income from property.