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jiltedjen

Lodger Mortgages

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It looks like a sly way to get around affordability criteria.

Step 1: Rent a room out for a while.

Step 2: When the lodger leaves less than a year later, you take on the full mortgage costs as if it were a traditional mortgage.

Hey presto! You now have a mortgage which would be unavailable under traditional multiples.

Do we know whether lodgers' rents would have to be added to regular income, as in C24? That would take a hefty slice out of the rental income.

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Ugh.

If I ever bought a house - i'd definitely consider renting a room out because I like living with others.

However I don't want that income to be added to my own to allow me to borrow and bid up the place more. That just captures the revenue stream entirely and hands it to the previous seller and the bank.

Edited by Frugal Git

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In a bank, or building society boardroom, somewhere, at this very moment, the finance people are meeting with the marketing people, struggling to work out how to articulate their exciting new offer which allows young parents to leverage their childrens' kidneys and other organs in order to get on the housing ladder.

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There is another side to this. When I went through the mortgage process I had to declare who was going to be living in the house. If I didn't want a joint mortgage with my husband, the lender assumed that he wouldn't be paying his way and would be a net drain on the household and reduced my affordability quite a lot compared to them not listed as living in the house at all.

If this mortgage allows you to have additional people living in a property without getting financial linked, I think it is good - otherwise getting rid of the stupid rule where any adult listed as living in the house, which isn't listed on the mortgage is considered a net drain on your affordability would be good.

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There is another side to this. When I went through the mortgage process I had to declare who was going to be living in the house. If I didn't want a joint mortgage with my husband, the lender assumed that he wouldn't be paying his way and would be a net drain on the household and reduced my affordability quite a lot compared to them not listed as living in the house at all.

If this mortgage allows you to have additional people living in a property without getting financial linked, I think it is good - otherwise getting rid of the stupid rule where any adult listed as living in the house, which isn't listed on the mortgage is considered a net drain on your affordability would be good.

Can't you have people living with you who are not dependants? Are then still considered a drain on your income?

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There is another side to this. When I went through the mortgage process I had to declare who was going to be living in the house. If I didn't want a joint mortgage with my husband, the lender assumed that he wouldn't be paying his way and would be a net drain on the household and reduced my affordability quite a lot compared to them not listed as living in the house at all.

If this mortgage allows you to have additional people living in a property without getting financial linked, I think it is good - otherwise getting rid of the stupid rule where any adult listed as living in the house, which isn't listed on the mortgage is considered a net drain on your affordability would be good.

I got my first mortgage in 2001 and was married at the time and didn't have this problem, when did you get yours?

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Part of the problem I see is it removes the safety net.

I have known a lot of people buy thinking that if things got a bit tight (lost job / unexpected bills etc) they could always take in a lodger whilst they got back on their feet. What will they do now?

This is just a bad idea that won't end well.

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Ugh.

If I ever bought a house - i'd definitely consider renting a room out because I like living with others.

However I don't want that income to be added to my own to allow me to borrow and bid up the place more. That just captures the revenue stream entirely and hands it to the previous seller and the bank.

And you can always sub let the rom to your mate nate, without paying an estate agent.

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If this mortgage allows you to have additional people living in a property without getting financial linked, I think it is good - otherwise getting rid of the stupid rule where any adult listed as living in the house, which isn't listed on the mortgage is considered a net drain on your affordability would be good.

I wonder if they're trying to protect themselves against beneficial interests arising.

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If you lie to buy, you will require a lodger if you wish to have bought so as to retire early.....one pays the interest the other the principle...all bills included. ;)

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Here we go again. Just as someone might have thought they could buy a property on their own, they can't. As soon as one person uses a dodgy lodger loan everyone else will have to.

Indeed...they will be called Liar Dodgy Lodger Loans...has a nice ring to it actually.

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