Letting my house without telling the mortgage company

by Readers Question

21:45 PM, 11th March 2013
About 8 years ago

Letting my house without telling the mortgage company

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Letting my house without telling the mortgage company

Letting my house without telling the mortgage companyWe live in a small two bedroom house with two children already and I have now found out I am pregnant again.

I rang the mortgage and asked about switching to a buy to let mortgage so we could let our house and rent instead . They made it sound really easy.

The paperwork came and it turns out we don’t fit about three of the criteria for a buy to let mortgage.

Now I don’t know what to do. It looks like its going to be impossible to get a buy to let mortgage.

Our credit it bad so switching to another provider is probably not an option either.

We now seem to be left with three bad options

  1. Let out the house without the mortgages consent but I am worried that a landlord insurance company might inform them or insurance would not pay out in the event of a claim.
  2. We sell the house at a big loss as there is no money left in it then have to pay off the rest of any debts secured against the house or
  3. Live in a very small house with either 3 kids sharing a small room or a child in the room with us.

We really are stuck at the moment as all options seem risky and stupid.

Any help or any other options would be greatly appreciated!

Many thanks

Isabelle Smith


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Comments

David Lawrenson

9:40 AM, 23rd June 2014
About 6 years ago

Also, there is a strong case for lenders setting out the charges for things like Consent to Let, when one takes out a mortgage. After all, it is hardly a rare thing that one may need to let a property at some time.

This could be a marketing opportunity for a savvy lender.

Going further, if one has say a 60% LTV or lower mortgage at current house prices, one wonders at the logic of lenders wanting to impose higher interest rates on borrowers if they move to a BTL mortgage or let out a former home under consent to let.

Sure, I accept that there are some people who may do more to keep their own home's mortgage on track than they might a buy to let. That argument is a fair one, but at 60% LTV and less, is there really a higher risk for the lender, and thus a need for a higher interest rate in the BTL case.

This is a market opportunity for a savvy lender - i.e. have same interest rates where LTV at or under 60%, as there cannot be higher risk to lender who has 40% plus headroom!

David Lawrenson
LettingFocus

Sadia Azhar

18:11 PM, 30th November 2014
About 6 years ago

I have 2 home and 2 different mortgages there. one i rent out through the agent, but i havent told to bank yet bcoz my sis name is on that property as well and i told them that my sis is living there. But last month i have received a letter from them and they asked me why my sis name is not on voting? So i told them last year it was on rent and thats why may be still on their name. Last year i changed the things becoz the rent was very low and morgage i was paying it was more then it. Someone advised me if i tell them the house is not on rent any more then i dont have to pay high interest.
But now i dont know what shell i do because the tenants paying all the bills. If i put 2bills on her name then is that will work or they will find out from tex people?
I was also thinking to tell them that my sis is moving out and its going back on renting but in that case they may be ask for proof bcoz they will think that bcoz of their letter we doing changing

David White

11:55 AM, 2nd March 2015
About 6 years ago

Hello,

My situation is, I had contacted my lender for consent to lease, but they would not give it due to our mortgage being a staff mortgage because my wife works for Halifax. We also explored changing to a buy to let mortgage, but Halifax wanted me to pay of a lump sum in the region of £15,000 in order to change mortgage over. I didn't have access to this amount of money and had nowhere to turn. We were living in a very small mid terrace house which was too small for our family, my wife was also suffering from post natal depression and we were far away from family who could offer us a bit of relief, in the form of babysitting etc. Because all this was going on, I rented my house out without consent, and am now renting a larger property in the mean time. I wanted to do the right thing but basically I ran out of options. I now want to address the situation again, but yet again I have no idea where to turn next, the same issues still apply. The only two options I think I have are 1, find the money to pay of a lump sum of my mortgage to convert it into a buy to let mortgage or 2, use a negative equity firm to sell the house and negotiate to pay a percentage of the shortfall. I understand the implications of the 2nd option but I am completely out of ideas, I really want for everything to be above board so I'm all ears if someone has any other suggestions to help me out of the predicament I find myself in.

I look forward to hearing from anyone who might have any ideas.

David

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