LETTERS
Mailbox WRITE TO US!
Please send us your questions, comments and suggestions concerning property, or the articles in First Time Buyer magazine.
lynda@firsttimebuyermag.co.uk
RENT A ROOM I’ve heard of the Rent a
Room Scheme as a way of earning some extra money in my new home.What is the scheme and how much could
I make from it? James Deardon
FTB says:The Rent a Room Scheme is a tax initiative designed to encourage individuals to rent out a furnished room in their primary residence. Under this scheme, homeowners can earn a tax-free income up to a specified threshold without the need to declare it on their tax returns with the threshold of £7,500 per tax year. This scheme is particularly beneficial for those who have spare rooms and wish to generate additional income by taking in lodgers or tenants. It provides a straightforward and incentivised way for people to make the most of their living space while giving affordable housing options for those in need. It’s important to note that tax regulations can vary, and it’s advisable to consult with a tax professional before embarking on the scheme.
AGE RESTRICTED? I have recently come into a significant inheritance, enabling me to make a substantial deposit for a house. Despite being in my 50s I am a first time buyer. Would I be approved for a mortgage considering my age and do I need to look for a specialised lender? JohnValentine FTB says: Many lenders will consider mortgages up to aged 75, with a few considering up to aged 80 and beyond, however, you need to show how you will fund the repayments over retirement age. The mortgage term will be restricted to the lender’s maximum age, or the age they are happy to approve based on underwriting criteria. The shorter the term, the higher the monthly payments. With your inheritance, you are likely to have a large deposit which means you will have a low loan to value (LTV) with generally lower mortgage rates. To ensure you have access to all lenders, we would recommend consulting a mortgage broker who can evaluate your personal situation to find the most appropriate lender and mortgage product to achieve your homeownership goals.
This issue’s star letter prize wins a £25 gift voucher from Desenio. Desenio is passionate about interiors and designing your home around you and your personality. Its business idea is simple – stylish wall art should be affordable to everyone. There are frequent new additions to this Scandinavian brand’s range, including the latest trends, artist collaborations and even collections from your favourite influencers. At Desenio there is something to suit every room and style, and there’s even an AI feature allowing you to create your own high-quality artwork from scratch. desenio.com
100% MORTGAGES I have seen 100% mortgages on the market. I am struggling to save enough for my own deposit as I am spending most of my income on rent. Are these mortgages too good to be true? Jason Miller FTB says: There are several lenders who offer products, where a family member can provide security to obtain a 100% mortgage. There is one lender offering 100% mortgages without family assistance, but this is only available for those renting. To qualify they must be a tenant who can evidence affordability for a mortgage and have a strong track record of rental payments. A 100% mortgage has advantages and
VISIT OUR WEBSITE For everything you need to know about buying for the first time, go to firsttimebuyermag.com prices fall and can be subject to stricter lending criteria. You will need to evidence affordability and have a strong track record of payments. disadvantages. On the positive side, it eliminates the need to accumulate a deposit, making it advantageous for those renting. However, such mortgages typically come with higher interest rates, although the one currently available has a favourable five-year fixed rate. Having a 100% mortgage can raise the risk of negative equity in a market seeing property
HELP FROM A FRIEND A friend who owns a property has offered to help me with my deposit and use it as an investment for themselves. Can they do this and, if so, what criteria need to be met? Kate Fenvier FTB says: It’s generous of your friend to contribute by covering some of the deposit, but caution is crucial. Since your friend isn’t an immediate family member, your options with mortgage lenders might be
limited, as many prefer deposits to be gifted by family. Carefully consider the terms and conditions associated with your friend’s investment. Questions such as whether there will be monthly payments or if they intend to hold a charge on the property should be addressed. Additionally, incorporating your friend as a co-owner of your home, given their existing property ownership, could result in additional Stamp Duty. It would be beneficial to seek independent legal advice.
First Time Buyer February/March 2024 7
Made with FlippingBook - professional solution for displaying marketing and sales documents online