Rent a room and cut your mortgage bill
Its approaching the time of year when students are looking for a place to stay so have you considered renting a room and using the proceeds towards your mortgage?
Think laterally its not only University cities that gave students most towns have colleges which are often populated by overseas students as well as local ones. Direct contact or advertising with the colleges may prove fruitful.
As a further incentive, the Government may offer you a tax break of up to £7,500 in year 19/20 (halved with your co-owner if the property is jointly owned). You would need to discuss your eligibility with a professional Tax Adviser. The property must be your main residence, you must not be abroad at the time of let and it must be furnished. The room must be for the purposes of accommodation not say for used as an office.
For my part, I’m a Mortgage Broker and dialect with your Mortgage Lender needs to take place before you decide to rent a room out. The perfect time for this is at the point of remortgage when you can evidence full disclosure to them by naming the lodger on the application form so there is no room for arguments that they weren’t told and exercise a penalty such as an increased interest rate. In fact, if you are remortgaging we would look to reduce your payments.
Can you use Lodger Income for mortgage affordability purposes?
The majority of mortgage lenders will NOT take lodger income into account, however there are some exceptions provided a couple of years of tax payment can be evidenced.
Niche Advice is a Mortgage Broker who can help with the placement of mortgages where there are to be lodgers in the property including applicants that are looking to benefit from the Rent a Room Scheme.