Mortgage on second house

lukebrown

I am looking at buying a house with my partner. We currently live in my house together. I am hoping to keep my property to rent out afterwards and I was seeking advice from others who may have done this. I know about the 3% stamp duty, but are there any other disadvantages?


The main issue at the minute is that I know if I get a permission to let and have a tenant (with agreed tenancy) for 125% of the mortgage that it will be classed as self financing and wont be taken into consideration in affordability. The problem is that it is a bit of a chicken and egg scenario, to do this we need to be renting it out when making the mortgage application, but as we live in the property we need it until we move.


My girlfriends and my salary combined is enough that if we put the mortgage payments as a monthly commitment (and the rest of the usual payment), we are ok on affordability. So, I assumed we would be ok as we do not need the self financing. However, when I use online affordability calculators, if I put I have a house with mortgage that I will be keeping, but have no tenancy yet, it seems to ignore the whole of my salary. Can anyone explain why is this?

ACG

There are lenders who will disregard the current rent with a letter from an ARLA registered agent confirming what the expected rental will be.

You will incur CGT when you come to sell up.
You will also have to declare the income to the tax man. Historically you could put interest down as expense, you can no longer do that. That involves doing a self assessment and paying the income tax on it (the mortgage is no longer classed as an expense).