Renting out my property

silvercar

Speaking to nationwide, I cannot rent out my property and they will apply a 1% addition to my mortgage rate

This makes no sense. Either you can rent out with a 1% loading or you can't.

i would phone back and speak again.

xylophone

If you sold your property, would the equity released be enough (with your earnings) to support you through the training course?

Presumably once trained, you can look forward to a salary high enough to permit you to save a deposit and buy again in your area of choice?

csgohan4

BurnsieUK wrote: »

Hi.

Thanks for the reply.

If I charged a lodger, say £450pcm, even without including bills, I'd still be out of pocket.

I assume I wouldn't be taxed on income from rent due to low earnings (under £14k).

The only thing I could do is to "move back in" (when my current mortgage expires) then renegotiate my mortgage and then reapply for the consent to let..... and move back out... Quickly.

Even if I took a longer fixed rate out with a higher %, I would still have to pay early repayment fees.

The only thing I am slightly miffed about is that when I remortgaged, I did ask about renting. They told be about the 1% increase, but didnt tell me about the fixed 3 year period after that. Should that be in my T&C's?

As you are 20% tax payer you would pay 20% income tax on the rental


https://www.gov.uk/income-tax-rates




Don't assume, check, or your costs will spiral out of control. A good business plan has correct figures and no assumptions made

BurnsieUK

Right... So I can't seem to quote properly.

So first of all it was a typo, and I meant that I can obtain a consent to let at a 1% premium.

Secondly the hopefully prophet I could make from selling my property would finance a lot of the training... However flats near me don't appear to be shifting, there's nothing huge profit margin apparently, and of course I'm in a fixed mortgage until autumn next year so woudl have to pay astronomical release fees.

Yeah, I was being naive about the tax... Which is a likely, so thanks for prompting.

The bit that I'm confused about, and always will be, is the fact that the consent to let agreement is a 3-year during which you are unable to change any mortgage agreement unless you move back into the property for a period of about 6 months (from what I can find). When I remortgage I deliberately asked about renting and was told about the 1% premium. I have never been told about this three-year locked in period however, and can't seem to find any reference for it online or in my paperwork

BurnsieUK

Stupid question (although I am stupid in this regard)

Say my current deal runs out next autumn, but I agree to let mine out (thus am unable to touch my mortgage for 3 years with nationwide)

As my fixed rate mortgage has technically run out, would I not be able to move to a different mortgage provider??

silvercar

As my fixed rate mortgage has technically run out, would I not be able to move to a different mortgage provider??

Check your T&Cs. Generally you can move away penalty free once the fixed term has finished, but occasionally there are mortgages which tie you in for longer.

Your problem will be that you won't find a lender to give you a residential mortgage if you are letting the property. AFAIK you won't get an immediate consent to let, so you would be looking for a BTL mortgage which would require a deposit of 20%+