Can owner sub-let without telling mortgagee/insurer?

[lizzielamb]

I am thinking of renting out my house but I have been told by my mortgage company I must get a new mortgage (not a buy to let) which will cost an extra £100 a month and tie me in for up to three years.

I am annoyed about this as the rent I would get would only just cover the mortgage. It seems the mortgage people want its share of the pie even though there is no profit in what I am doing.

A few people I know who rent out their homes have either switched easily to a buy to let mortage at no extra cost per month or have not had any additional charge, apart from admin charges, on their monthy morgage payments.

I have now been made aware that my landlords insurance would become invalid if the mortgage holders are not informed the propery is let.

Also apparently the mortgage company could reposses the property if they are not informed it is being rented because it is deemed breach of contract.

If I sell the property instead of renting I will lose £3,000 because of early repayment fees.

I am wanting to rent the property because I have got a new job out of the area.

Please can anyone offer any advice

[Poppy]

Please will you tell the members which company you have your mortgage with.

[specialist]

I agree there is something amiss here I would suggest you speak to your lender, speak to a section head or higher and mention 3 magic letters the FSA
this is the body that regulates financial services. If you threaten to complain things change quite quickly!!! Also contact the Council of Mortgage lenders.

On the buildings insurance issue this wrong
Good luck




I am thinking of renting out my house but I have been told by my mortgage company I must get a new mortgage (not a buy to let) which will cost an extra £100 a month and tie me in for up to three years.

I am annoyed about this as the rent I would get would only just cover the mortgage. It seems the mortgage people want its share of the pie even though there is no profit in what I am doing.

A few people I know who rent out their homes have either switched easily to a buy to let mortage at no extra cost per month or have not had any additional charge, apart from admin charges, on their monthy morgage payments.

I have now been made aware that my landlords insurance would become invalid if the mortgage holders are not informed the propery is let.

Also apparently the mortgage company could reposses the property if they are not informed it is being rented because it is deemed breach of contract.

If I sell the property instead of renting I will lose £3,000 because of early repayment fees.

I am wanting to rent the property because I have got a new job out of the area.

Please can anyone offer any advice

[lizzielamb]

It's with halifax

[islandgirl]

Now we know how they pay for all those fancy ads...

[Pete Matthews]

Hi Lizzie

I have some experience of this as a director of a financial services company.

You need to obtain consent to lease from the Halifax, Their stated Criteria for this is that:-

Your Mortgage needs to have been running for two years
The loan must be no more than 85% of the property value.
The rates available are 5.69% for loans less than 75% property value and 5.99% for loans more than 5.99%

With regards to your landlords insurance i do not believe it would be invalidated if the interest of the Halifax were not noted. I also think it highly unlikely that they would repossess if the property was let without permission.

Lenders tend too repossess if their security is compromised the main two reasons for repossession are:-

Not paying your mortgage
Allowing your property to fall in to disrepair.

As i see it you have a few options:-

Pay the redemption and take the Halifax buy to let product.
Remortgage to a buy to let mortgage with another provider
Sell your property

You may find Halifax flexible about the redemption penalty although in my opinion this is unlikely, particularly as the buy to let products they have also carry redemption penalties.

If you want more advice you can call one of my Mortgage Advisors on 01325 354 49.

Regards


Pete

[landlord mortgages]

Easy way for lender to make money....get a buy to let and save!!!

Lee