Mortgages - any experts around? Two questins...

[LovelyTinOfSpam]

Hi there

We are thinking of extending our house and I have a couple of questions re. getting our hands on some dosh. Basically I have a flat in my name which we want to borrow the money against as I can offset the repayments against tax on the rental income. We already have a reasonable mortgage on our house, it's currently about 25% of the value of the house.

1. Can someone be in a mortgage if they are not on the deeds, from the point of view of their income? So if a property is in my name, can DH and I get a mortgage on it (so taking his salary into account) even though it's just my name on the deeds? As they will still get the property if it goes tits up...

1. Can you get a mortgage on a property which isn't already mortgaged? As you're not using the money to buy the place IYSWIM?

TIA advance for any pointers, I think we may need to talk to a professional though at some point, just trying to get an idea of what is possible

Oh well worth a try

1. no
2. yes

Hope that helps!

have you tried asking the same questions on the mortgages forum on the money saving experts site?

Im clueless about mortggaes but got some good advice off there recently

For your first question, the mortgage lender will need your DH's name to be on the deeds as well, not just yours. I've just been through similar hoops with mortgage lenders and the accountant. I was deeply irked by the fact that joint mortgage = joint ownership = payment of rental income to both DH and I so he ends up paying tax on the wretched rent. Or so said our accountant anyway

For your second question, you need to raise this with the mortgage lender as some lend only on a purchase or remortgage, some will lend on an equity release etc. But, check with the inland revenue as I think that unless you got the mortgage for the specific purpose of buying the flat, you can't offset the rental income for tax purposes against the mortgage.

Oh, and having just been through similar issues, it will be cheaper to borrow against your main residence than to borrow against a buy to let property. As I'm sure you know

Wow thanks. And the answers are the same! Good start.

I find it odd that joint salaries can't be taken into account - but looks like that's the way it is...

onlyaphase your points are exactly what I have been wondering. There is no mortgage on my flat (had it and paid it off before met DH and it's now rented) and so I don't think I actually will be able to get a mortgage on it - as a mortgage has to be to buy a place I guess.

I suspect we'll end up remortgaging our house - which is fine...

Thanks everyone this has really helped

You can get mortgages on a place you own outright (currently doing this) but not all lenders will do this e.g. First Direct dwill do this, but not on buy to lets. A mortgage broker will be of great help (and they don't have much to do at the moment either)

And you can change the name on the deeds relatively easily you know, so your DH can go on the deeds of the flat if this helps to get a mortgage. Stamp duty is only payable on a purchase, not a gift, so you don't get stuck for this when adding DH to the deeds.

Firstdirect also offer an appealing offset mortgage so I can have the cash available but not pay interest until I actually use it...

Putting DH name on the deeds would make sense... but... I don't know. Emotionally I would find it hard to get round the "this is mine" thing, although I trust him implicitally.

Actually you have a point, and reminded me. Must write will...