I didn’t know I had to tell my mortgage company that I’m letting my property

by Readers Question

13:48 PM, 15th August 2013
About 5 years ago

I didn’t know I had to tell my mortgage company that I’m letting my property

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I didn’t know I had to tell my mortgage company that I’m letting my property

HELP! I am in desperate need of advice. I didn't know I had to tell my mortgage company that I'm letting my property

Last year I started renting my home but I didn’t advise the mortgage company, I really wasn’t aware that I had to do it and it was never raised by the rental agency.

I am trying to find out what would be the implication as I am very worried about what could happen.

What is the likely scenario that I am facing?

Kind regards

Nick



Comments

Mark Alexander

13:59 PM, 15th August 2013
About 5 years ago

Good news Nick, no need to buy soap on a roap, you're not going to prison, not for this anyway 😉 LOL. You are probably in breach of contract but you have not committed a crime.

The reality is, if you carry on paying your mortgage, there is a very strong probability that nothing will happen at all. However, there is some risk that the mortgage lender will find out and they could demand that you repay their mortgage. We ran an article for a chap who this actually happened to - see >>> http://www.property118.com/mortgage-express-are-forcing-me-to-sell-my-home-help/37778/

This is what I would do if I were you.

1) Find out whether you are eligible for a buy to let mortgage - contact this Member >>> http://www.property118.com/member/?id=314

2) Seek independent advice on whether your mortgage lender is likely to grant consent to let - same contact as above.

3) If the chances look good to obtain consent to let and you have a backup plan in place to remortgage the property if necessary then approach your lender to request consent to let.

4) Be prepared that they could say no and have a back up plan which might involve you having to sell the property. Bear this in mind when granting tenancy agreements.

5) I believe in full transparency but others would say keep your head down and deal with the problem if it ever comes up. Only you can make that choice.

I hope that helps.
.

Neil Robb

21:22 PM, 16th August 2013
About 5 years ago

I had to do this I think they charged me £150 for arranging this. I would have a back up plan just in case.

David Sweeney

23:18 PM, 16th August 2013
About 5 years ago

I would urge Nick not to "keep his head down" as the current arrangement lessens the tenants rights and, as they are probably paying Nick £500 - £1000 a month that isn't a good way of doing business.

Some forums concentrate on how landlords can make money, others on landlords rights. Property118 manages to incorporate both but let's remember tenants rights - these are the guys that our businesses are based on.

Jerry Jones

17:45 PM, 17th August 2013
About 5 years ago

Reply to the comment left by "Neil Robb" at "16/08/2013 - 21:22":

You got off lightly - in 2008 Santander charged me over £1000 for permission to let. I was advised that it was the best deal I would get; far better than remortgaging. Since then my pay rate has dropped to 0.99% on a lifetime tracker. Boy was that a grand well spent 🙂

Vanessa Warwick

7:59 AM, 18th August 2013
About 5 years ago

Well said Dave.

Without tenants, none of us have a business, so we need to think of them as much as ourselves.

As to the myth that "lenders don't care as long as you keep paying the mortgage", have a look at this ...

http://www.propertytribes.com/lenders-dont-care-as-long-as-mortgage-paid-t-8532.html

My advice is to contact your lender and say that your circumstances have changed and you've had to let our your property.

Your circumstances ARE allowed to change!

Ask for their advice - they may give you "consent to let" or they may want to transfer you to a BTL mortgage.

Worst case scenario, you can always re-mortgage to another BTL mortgage.

We have a free mortgage sourcing tool where you can find the ideal BTL mortgage that suits your needs:

http://propertytribesmortgages.co.uk/

Either way, if you are letting your property, its time to put it on a professional footing and not "hope" that you don't get caught out somewhere down the line.

Facing up to this issue now is far safer than waiting for it to come and bite you imho.

Mark Alexander

8:44 AM, 18th August 2013
About 5 years ago

Worst case scenario is MUCH worse than Vanessa has suggested. The lender can refuse permission to let and call in the loan and if you are unable to sell or remortgage, the lender can repossess the property, remove the tenant within two months regardless of how long they have left on their fixed term tenancy or whether rent has been paid up front and sell for less than the mortgage. In these cases the lender puts so much pressure on you to recover their losses that declaring bankruptcy is your only option. See >>> http://www.property118.com/buy-to-let-anguish/42349/

Property118 also has a mortgage sourcing tool which is free to use - see >>> http://www.property118.com/buy-to-let-mortgage-calculator-2/
.


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