HaltyLad

Hello

We are moving from the UK to Auckland in 5 weeks time and we have not managed to sell the house yet. We thought we would rent the house out and convert our repayment mortgage to a interest only 'buy to let' mortgage quite easily as we have over 40% equity in the house.

But due to the new stricter banking rules in the UK we have found it impossible to get a buy to let mortgage.When we say we are moving to New Zealand they say they can not provide anyone living abroad a mortgage.

Does anyone know of a company who let people moving abroad get an interest only mortgage to rent there house out while they are abroad.

We also have 'repayment vehicles' which could pay 80% of the outstanding debt on tany interest only mortgage but LLoyds bank do not think that is acceptable they require you to have 96%!!! to convert to an interest only mortgage. Its been a nightmare.

Any help anyone could give us would be greatly appreciated

MrsFychan

when we were moving, 2yrs ago, and our first house sale fell through and we looked a renting we were told that we could just keep the house on the same mortgage as it was not our fault and we had no intention to actually be landlords. In the end we couldn't find a tenant at the price we needed to cover the mortgage, we had been paying less on the mortgage as husband had gone on before myself and the kids so I called them and told them I was left on my own with the kids and could not pay, then when we moved over, 6 mths, later we stopped paying altogether and the estate agent did all the house viewings. We had family friends pop in during the week to keep the house in order.

davros1984

I had zero success with trying to get a mortgage in UK whilst living in NZ. It was made clear that I had to have a UK income to prove I could meet mortgage repayments. ( i looked at self buy as well as buying a property for my sister to occupy). It will be a lot easier if you are still in the uk and still working/earning.

TommyLuck

^^^^^^^^^^^^^^^

Same as ...



To the OP - What's stopping you from just carrying on with your existing mortgage?

Snap Shot

I think if you are going to let your house out you have to tell your lender. In that case you require a buy - to - let mortgage. I understand this is a refinancing package regarding the mortage and the interest is not as cheap as a, 'normal' mortgage.

There's also implications with your home insurance too when it comes to letting your house out.

What about people who let their house out without telling their lender or genuinely did not know they had to ? Um, dunno.

OP is on the horns of a dilemma but I think OP knows this !

We sold our house lock, stock and no smoking barrels. I didn't want, 'a foot in both camps' when it came to relocating to NZ.

I understand there are many reasons why people retain property in the UK.

I also didn't really want to rent our house out in Britain and end up renting a house in NZ. Then not being able to buy in NZ as our equity was tied up in the UK. However, it suits some people.

I didn't want to have tenants who would trash the place and also, I can do without being an absentee landlord. I've heard about bone idle letting agents too. There's probably success stories too.

TommyLuck

This happened to family in Queensland, where apparently Landlord and Tenant laws are vastly weight toward to tenant.

Quite right some might say, but this was a story that if I made it up, you'd tell me I was on something. To cut a long story short;

Turns out that although a young family was living there, it had also become a meth lab. Very sad. Took them years to get them evicted and the house needed some serious work doing to it after the mess that was made.



When I was trying to get a property in the UK the major thing that stopped us was the fact that my wife is currently working on a contract basis and that the lack of security in that sense was something they weren't willing to risk on.

Some of the UK providers were close in the sense that if that situation was resolved they'd be keen to help us out.

Having said this they all wanted me to state my "intention" that I'd return to the UK within 3 years. Speech marks because intention is extremely non-committal in reality.

Most weren't having a bar of it, and some offered assistance on a ludicrous basis like a 60% deposit and £50k sitting in a fixed rate bond until I returned to the UK by way of some sort of guarantee.


Since going through this, I had been thinking that perhaps I should have bought before leaving the UK, but in fact it seems that I may have ended up in a similar scenario to the OP anyhow and would be no better off and would have had the hassle of selling anyway!

jmh

I had no problem with my mortgage lender back in 2011 (Nationwide). My mortgage was quite low and I had been with them a long time which might have made a difference. They do charge and extra 1% but considering my variable rate was under 3% that wasn't a big deal. This was a repayment though, not interest-only which I think is the main problem.

You will need to get landlord insurance but I was astonished to find one cheaper than my existing insurance. I found a really good broker if you want to PM me. Had a claim not long ago too and it all went through fine.

I can't comment on agents - mine was fine but I know others have had a bad experience. I let my property because of the sluggish property market and have recently sold it for GBP 50,000 more than I would have got for it back in 2011 so it was worth it (I also wasn't entirely sure my move was permanent which was another reason for not selling). My rent more than covered any costs so it was all pretty easy. Try having another chat to your mortgage company about your position. I wonder whether they would offer interest only for a fixed period, e.g. 12 months. If you let it out through an agent who vets tenants properly they probably will insist on a 12 month tenancy.

MrsFychan

you could also ask for a mortgage holiday.

as I said we we're advised that as we didn't really have any option as we never really wanted to rent the property we could stay on the same mortgage and rent it out whilst trying to sell.

janiejones

We got a Bank of Ireland mortgage through the Post Office, they were okay with us being overseas. That was 2011,not sure if that's still the case. It might be worth you contacting a mortgage broker, as they should be able to find you a provider that will deal with you.

HaltyLad

Thanks for all the respnses its much appreciated.

We have permission to rent just the potential rent is lower than the mortgage as it stands. Thats why we wanted to reduce the monthly payments by going to interest only. Lloyds (current lender) have refused this and a 'buy to let mortgage'. They require you to be able to pay back the full loan without using any equity in the house!!. It all has to come from 'Repayment Vehicles' (pensions tax free lump sums, endowments etc). We originally had an approval to interest only for the total we could pay back by repayment vehicles, then the outstanding bit would stay on repayment mortgage, this reduced the monthly payments by half.

Then they changed there mind and increased the amount we had to pay back to over 95% of the loan.

We have tried other mortgage lenders for buy to let and again the new regulations mean they will not give mortages to people who will be living abroad, even if you apply while in the UK. i spoke to a broker and she said no-one is giving mortages to ex-pats.

I was just hoping someone might know of a international bank who might have provided the service.

We want to sell the house but no-one seems to want to buy it at the minute, renting is definately Plan B. We may need to look into this 'mortgage holiday', how do you go about getting this and how does it work, do you have to tell the lender you can not afford to pay the mortgage? or do you have to keep on paying the full amount?

Thanks again for any help provided.

MrsFychan

mortgage holiday is for when you get on hard times and cannot afford to pay the full mortgage so you take a break. you would have to speak to your mortgage company about it as it differs from one company to the next.
we just stopped paying our mortgage.

as for selling are you being realistic on price, have you had any sort of offers? remember a lower than needed offer may be the best in the long term. think about mortgage payment requirements say over 6mths against selling at a lower price