Help Pay the Mortgage With a Lodger
With the stock market dipping and even Marks and Spencers not doing very well you would think that the Government would do something to help.
This is unlikely though and realistically there is not much they can do.
The Bank of England along with other world banks have reduced the base rate but all this seems to have done is increased the Banks profits.
Maybe now is the time to think about how you can raise some extra income and possibly you could help pay the mortgage with a lodger.
Have you got a spare room, could you actually live with a stranger? Taking on a lodger has obvious financial advantages, one of the best is that you can earn £4,350 per year tax free thanks to the Government's rent-a-room scheme.
With average rent about £100 week you shouldn't have to pay much Tax, if any.
But don't rush into it there are lots of things you have to consider before you become a landlord.
You might think letting to good friends is a good idea, but think VERY carefully before doing this, after six months of being in the same house you may not be friends any more.
A personal recommendation, a "friend of a friend"this is probably the best option to help pay your mortgage with a lodger.
If you can't find anyone that waythen try your local employers, universities, local authorities or hospitals.
You can also advertise in you local paper or look to see if anyone is looking for a room.
When you have found a Lodger you need to have a plan.
Lodgers occupy your home without any security of tenure rights.
Because of this, they have no right to stay once you give them their notice.
Mind you, although you don't need a formal legal agreement to help you pay your Mortgage with a lodger as you would with a full tenancy, I would recommend that you get one.
Protect yourself against things that could go wrong, and hope, as will probably be the case, that all goes well "It worked really well for me," says my friend Shirley, who had a lodger living with her in Hastings.
She is on her second Lodger and says that she hardly ever saw the first one.
They even became good friends.
Making new friends is a great bonus if it happens but paying your Mortgage with a Lodger is the bottom line.
So, Letting your room could be a good financial move for a variety of reasons, extra income for little work, £4,350 pa Tax Free, reduced stress when money is tight.
From a purely financial viewpoint, you should see Mortgage Broker as well as they may be able to suggest alternative mortgage arrangements.
If you go decide to help pay your Mortgage with a Lodger, you should always contact your mortgage lender beforehand as you might be breaking the conditions of your agreement.
Most are happy with this and all should be fine, but be absolutely sure.
This is unlikely though and realistically there is not much they can do.
The Bank of England along with other world banks have reduced the base rate but all this seems to have done is increased the Banks profits.
Maybe now is the time to think about how you can raise some extra income and possibly you could help pay the mortgage with a lodger.
Have you got a spare room, could you actually live with a stranger? Taking on a lodger has obvious financial advantages, one of the best is that you can earn £4,350 per year tax free thanks to the Government's rent-a-room scheme.
With average rent about £100 week you shouldn't have to pay much Tax, if any.
But don't rush into it there are lots of things you have to consider before you become a landlord.
- Choosing the right lodger is absolutely crucial.
- Do Identity checks
- Do Credit checks
- Ask friends if they know of anyone.
- Can you cope with having a stranger in your house
- Will your lender allow you to have a lodger
You might think letting to good friends is a good idea, but think VERY carefully before doing this, after six months of being in the same house you may not be friends any more.
A personal recommendation, a "friend of a friend"this is probably the best option to help pay your mortgage with a lodger.
If you can't find anyone that waythen try your local employers, universities, local authorities or hospitals.
You can also advertise in you local paper or look to see if anyone is looking for a room.
When you have found a Lodger you need to have a plan.
- Always lay down clear house rules - attention to detail is vital so that everyone knows where they stand.
- Insist that payment is via standing order, the last thing you want is having to remind them every week/month.
- Photograph their room at the beginning so that there is no argument as to whether that hole in the wall was always there.
Lodgers occupy your home without any security of tenure rights.
Because of this, they have no right to stay once you give them their notice.
Mind you, although you don't need a formal legal agreement to help you pay your Mortgage with a lodger as you would with a full tenancy, I would recommend that you get one.
Protect yourself against things that could go wrong, and hope, as will probably be the case, that all goes well "It worked really well for me," says my friend Shirley, who had a lodger living with her in Hastings.
She is on her second Lodger and says that she hardly ever saw the first one.
They even became good friends.
Making new friends is a great bonus if it happens but paying your Mortgage with a Lodger is the bottom line.
So, Letting your room could be a good financial move for a variety of reasons, extra income for little work, £4,350 pa Tax Free, reduced stress when money is tight.
From a purely financial viewpoint, you should see Mortgage Broker as well as they may be able to suggest alternative mortgage arrangements.
If you go decide to help pay your Mortgage with a Lodger, you should always contact your mortgage lender beforehand as you might be breaking the conditions of your agreement.
Most are happy with this and all should be fine, but be absolutely sure.
Source...