Worried to call mortgage supplier over consent to let

by Readers Question

9:00 AM, 5th April 2019
About 11 months ago

Worried to call mortgage supplier over consent to let

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Worried to call mortgage supplier over consent to let

I bought my house mortgage free 18 years ago to house myself and my 2 kids. I got a residential mortgage with Halifax 14 years ago and built a 2 storey extension to the side of my house consisting of granny annex & double garage. The granny annex was to house my ill mother, but unfortunately she never lived long enough to move in, so, over the past 12 years I have been renting the granny annex out. I also converted the double garage into a self contained space and this is also rented out for 4 and half years now.

Council tax is being paid on 3 separate households. With regard to the mortgage I signed up for a residential 5 year fixed deal with Halifax only 6 months ago (15 years term left). The mortgage has always been with Halifax since the start and deals are not forthcoming from other mortgage providers as I live off maintenance from me Ex and am on/off working.. am 53. I have 90% equity in the house and 10% mortgage.

I’m worried to contact Halifax and confess the rentals, but I know I need to do so for peace of mind. So my question is that if I go for ‘consent to let’ with Halifax should I fess up to the fact I have been letting these spaces for the length of time I have? Could I just talk about the 2 current tenants, one who moved in Dec 2016 and the other March 2018 which might have more financially palatable consequences for me if they decide to back charge interest? How do you think Halifax will respond in any case that I let without their consent? What should my approach be?

In the long term I may move into the annex myself and rent out the main house or indeed sell the property. I know I need to make the call but I just want some good advice before I do so please.

Thank you for listening

Julia



Comments

Neil Patterson

9:03 AM, 5th April 2019
About 11 months ago

Hi Julia,

Can I ask if the lender knows about the physical changes to the property?

The good news in all this is that it is a very low LTV and hence risk to the lender so I don't think anyone is going to panic.

Mark Crooks

9:51 AM, 5th April 2019
About 11 months ago

Personally I wouldn't bother mentioning it.
It's quite a grey area as well as you are also residing in the mortgaged property. So it's not a BTL property.
So long as you are making your payments on time I'm sure the Halifax are quite happy.

If you really cannot stop thinking about this then you should give them a call and tell them everything and be prepared for an increase in interest rate. If they don't change the rate then that's a bonus.

John Frith

11:40 AM, 5th April 2019
About 11 months ago

Julia, what is the situation with the title deeds on the 3 accommodations?

TK

12:26 PM, 5th April 2019
About 11 months ago

I wouldn't be worried about the lender, they would invariably have different options depending on whom you spoke to. However I would be more worried about what type of "home insurance" you have in place, as this could be more of an issue if something was to happen.

Dylan Morris

15:07 PM, 5th April 2019
About 11 months ago

Reply to the comment left by TK at 05/04/2019 - 12:26Very good point about insurance. My advice would be definitely don’t contact the Halifax as you’ll just open up an unnecessary can of worms. You’re living in the property and mortgage payments are up to date, so what’s the problem ? It’s a bit like seeing a police car on the side of the road and pulling over and walking up to the officer and telling him you’ve just been doing 50mph in a 30mph zone and asking what he’s going to about it. The Police officer has better things to do .........so do you.......and so does the Halifax.

Gary Hodge

16:31 PM, 5th April 2019
About 11 months ago

I've been letting rooms on and off to lodgers for 30 years, lenders aren't that bothered by it as long as the mortgage payments are made. As long as you are resident, its your main home, etc, you should be fine.
Are you letting on tenancies or licences?
I've not experienced, but have read, that insurers can be a little more pedantic. As already suggested ensure that you have adequate insurance.
Without wishing to add to your worries, brush up a little on HMO regulations as its preferable to stay on the simple side of things as a resident landlord.
Also, be aware that the VOA can impose business rates if you let 6 or more bed spaces, but the council are probably happy collecting the additional council tax in your situation.

Paul Shears

23:19 PM, 5th April 2019
About 11 months ago

"If it ain't broke, don't try to fix it."
Insurance for peace of mind only.
Halifax - leave well alone.

Colin McNulty

7:11 AM, 9th April 2019
About 11 months ago

Of course the correct thing to do is to run it past your lender, that way you'll have a clear conscience, be able to stop worrying, and know you're doing the right thing. Yes there may be a financial impact, but then you are getting 2 extra income streams to offset that.

I'd make sure you have a backup plan if they decide to call in the mortgage, but then you should have one of those anyway. You say the mortgage is only 10% Julia, is that in unsecured loan territory, e.g. £25-50k?

The bigger worries for me are, as others have said, insurance should the worst happen, but also planning. Did you get planning permission from the council to split your house into 3 separate units (not the same as council tax)?


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