Betty Boot

We have had our house ont he market for about a month now without so much as someone wanting a nosey I have been in touch with the estate agent and they say there is nothing wrong its just the price bracket its in really that arent moving yet. So i guess we either have the option of drastically reducing it and not having much to move with or putting it up for rent. (i know a month isnt a long time but the agent said the first 6 weeks are the most important when you will get the most interest!!!!)

I have been in touch with the bank and we would have to get 'consent to lease' which makes our monthly mortgage payments go up by around £100/month, a set up fee of £1000 and 3% early repayment fee if we sell before 3 years, which i guess we would want to do to have a deposit on a home in Australia. So what i am asking is do we really need to change our mortgage over and incur so many fees? Do we have to tell the bank? We have a friend that is very keen to rent our house and they are long term renters, with a view to buying. They have said they would pay us directly, but it doesnt really sit comfortably with me. I would rather just sell the house, cut our losses and go but if that doesnt happen then renting is our only option i guess? It just seems so much hassle and such an expense. Btw the monthly rental income would cover the increased mortgage and pay an agents fee. Any landlords out there share their experiences on this please?

Thanks, BB

N1cky

Wow, thats alot. We rent our house out in the UK, and I must admit I didn't inform the mortgage company. Not through trying to be devious, I didn't realize I needed to when we first rented it out.

Anyhow, when I finally wrote to them to change our address, they wrote back saying I needed 'consent to let' and I filled the forms in and got permission. They kept us on the same mortgage with no additional payments, and the set up fee was 100 gbp.

An agent looks after our house and i'm so glad, they have been excellent and it takes all the hassle away. I wouldn't do it any other way.

JAJ

Your house is only worth what the market will pay for it. If you have no interest, it means the asking price is too high.


All depends on the terms and conditions of your loan. If you breach these conditions, and the bank finds out, you probably won't go to jail but they probably have the right to demand immediate repayment of the mortgage and put the property into repossession proceedings if you don't have the cash.

You will absolutely need to tell the insurance company. They may tell the bank, or they may not. Depends on their links with the bank, and the terms and conditions.

Read the terms and conditions. The bank has to respect these, also if they are unfair you might have scope to challenge them that way. But you might need to go to court.

The bank will need to know your correspondence address, to send you statements and correspondence, how do you plan to get around this?

Do not even think about renting the house without a proper legal agreement for the rental. In fact, renting to friends is generally a bad idea. And if your friends want to buy, why not do a deal with them now to sell the house - at the real market price, of course.

Betty Boot

Thanks for the reply N1cky. Can i ask who your mortgage is with? We are with Halifax and after doing a search on google it seems quite a common problem with them and people are unhappy with the fees for this If i were to change lenders though i am guessing i will have the same problem with new set up fees and early repayment penalties I was hoping there was just a small admin fee as you have encountered!! Are you glad you rented the property out instead of selling?

Betty Boot

Thanks for all the advice - yes I agree the price must be too high so we'll try reducing it to see what happens. I also have the feeling renting it to friends is a bad idea and i definately wouldnt do it without an agent. Our friends would love the buy the house but can't get a deposit together for the mortgage unfortunately. Thanks again.

N1cky

We're with Northern Rock, luckily they have been reasonable with us, maybe they take the circumstances into consideration too, our move was a job relocation with no option of staying in current job, and we are on temporary visas. Maybe if we were choosing to emigrate it would be different

Our move came about very quickly, we received a formal job offer subject to visas at the end of August, and our move date was late November. We had only owned the house for 1 year, so would have had a big penalty with the mortgage company for selling, and the housing market wasn't great. We had a couple of 6 month leases, 1 of which really didn't look after the place. We now have good tenants in who have been there for 2 years and seem to want it long term, so for us it has worked out really well. We're not in a position to buy out here either, so owning property somewhere is good for us financially.

koalakim

Every mortgage lender is different.

We didn't say anything but was always a bit concerned about it. Anyway, one time we were over in the UK we had to see someone there about something else and asked the hypothetical question! They said, ah....well if it's only short term lets i.e. 6 month contracts then probably best not to say anything as then we'll have to change your mortgage and charge you more! We only ever got 6 month leases so didn't worry too much but it was only for a couple of years as we then sold.

We did change our contents insurance and took out landlords insurance. Because we had a flat our buildings insurance was part of strata fees etc.

You could still rent your place out privately but get a proper contract in place and get someone you can trust to do 3 monthly checks.

Good luck!

Kamie26

From what I understand about mortgages, you don't have to advise your bank if you are planning to rent it out if it is has been your actual residence and you didn't buy it solely to rent out. If you have lived there for x amount of years, you can more than prove your case.

It seems to me that they are looking to change your mortgage to a buy to let one, which changes your conditions, which is why your payments are going up. I am almost 100% sure that you are not obligated to do this if you want to rent your house out but it would be worth while taking independent advice before you sign any documents with the bank. Banks rely on peoples ignorance of the rules to make themselves more money and sometimes the people in the banks don't know the rules themselves. I have lost count of the number of times that I have gotten very poor advice from advisors, I've worked in finance and have had to tell people in the banks what the rules are on occasion.


Also, if you rent it out, you will need to get a rental insurance plan. Insurance companies will not inform your bank as to what insurance plan that you have taken out as this would breach data protection.

Betty Boot

Thank you for all the replies, I am going to research more details of our mortgage and perhaps speak to a financial advisor. I hate the fact the banks always end up making money out of everything Although we would rather sell, renting seems the way to go in the current climate, plus we will be renting long term on the other side anyway, so as someone else mentioned, at least we have our foot on the ladder somewhere!

Thanks again

Betty Boot

I have dug out my 'guide to your mortgage booklet' and found this - so looks like the bank must be informed and that they are of course within their right to charge whatever fees they choose

23. Occupation of the property by people other than the borrower Everyone who is 17 or over who is not an owner of the property but is to live with you at the property must sign our form of consent to mortgage. Our conveyancer has to make sure that they do. This does not apply to your children and the children of anyone else living with you at the property. Unless you get our written permission beforehand, you must not create any tenancy (or part with or share the occupation or possession) of the mortgaged property. Any such tenancy or occupation could mean the property is worth a lot less.
If you would like details of our letting policy, please contact us. We will then set out the conditions that apply to our letting policy including any fees that are applicable.

rockpeblar

We rented out our house in Plymouth almost four years ago through an agency. Same tenant since the start, no hassles and Nationwide have been great with the mortgage, not forced on a buy to let mortgage. Would love to sell up and buy something here but not until the f/ex rate improves!!

bingobob777

Just remember it will only decrease in value

Alfresco

We have let ours out. Had to remortgage with another lender as Northern Sand (rock) refused to allow us to let it out for some strange reason.

rockpeblar

Yes, well aware of the risk, hence why we're looking to sell up this year. Just hope Oz prices also devalue soon as well!!

steen1976

Short to medium term yes.