Will they find out

quickquestion_3 · 8 July 2008 at 11:41AM

Hi There, I have been lurking in the shadows for some time reading posts so when I came up against this problem I thought the MSE community might be able to advise.
First post so apologies if I ramble, or if it is on wrong board.

I got a place in University in Northern Ireland and so am moving there with my boyfriend at the end of August (we're both originally from there)

I put my flat on the market in May and since then not ONE viewing. Obviously I will not be able to afford mortgage in Scotland and rent in N.Ireland at the same time, as as it is looking unlikely that it will sell, many people have suggested that I rent it out.

I went to speak to the bank about getting another mortgage way back in May and casually slipped this into conversation and the lady said "we wouldn't allow you to do this" and I just started talking about something else as it wasn;t really a serious option.

As time has went on I have started considering it more and more, and am now pretty certain that it is the only way I will survive it being repossessed. I was wondering if anyone knows what would happen if some months down the line the bank somehow discovered that I was not living there. What would happen? would they repossess the house? could they take me to court?

Friends have told me not to tell them, that as long as i am paying the mortgage on time (with the rent from the flat) they will not bother - they don't take out peoples files and randomly check them out for no reason.

I am really at my wits end as I am sure lots of people are who are trying to sell a house. I just don't see another option. Even if I do rent it out I will still need to put some money to it myself to cover the mortgage / insurance.

Can anyone offer any advice - Also if I register with a managment firm to look after it will they ask me about my mortgage? will i need to provide my mortgage details?

I know this is not right, but I can't see another option.

Please help!

minimike2 · 8 July 2008 at 11:44AM

If you dont tell them there is a tenant in there then they wont know, unless you stop paying anyway, then they go to reposses and find they have to wait that little bit longer while they get the tenant evicted.

You will be breaking the Ts&Cs of the mortgage - but its your call.

quickquestion_3 · 8 July 2008 at 11:47AM

minimike2 wrote: »

If you dont tell them there is a tenant in there then they wont know, unless you stop paying anyway, then they go to reposses and find they have to wait that little bit longer while they get the tenant evicted.

You will be breaking the Ts&Cs of the mortgage - but its your call.

wow - thanks for the quick reply!
I understand I will be breaking the terms and conditions. what would be the penalty?
I am afraid to post which bank, but do you have any idea of general policies?
I don't believe the mortgage would get into arrears. My family would help me out if required and the flat is extremely well positioned to let out.
I'm just worrying and worrying - I have finally got into a course that I want to do and when I hear that back in April I couldn't have anticipated all these additional stresses!
nothing is ever easy!

Voyager2002 · 8 July 2008 at 11:52AM

Really, this would not be a good idea. If your bank/lender did somehow find out, you would really be in trouble. You would have broken a major term of your mortgage, and would effectively be at their mercy. They might be able to demand immediate repayment of the entire amount outstanding, and repossess if you could not pay everything off. Plus a range of hefty charges, of course.

One case I heard of: a group of people, including a law student, opened a letter that arrived in their rented home addressed to the landlord, realised that s/he was letting without the lender's position, and effectively had her/him over a barrel. I understand that they stayed there as long as they wanted to without paying a penny more rent once they knew the situation.

Really, you only have three options. One is to understand that there is a price at which your place will sell, and you need to make it cheap enough for someone to snap it up You would lose by doing this, but if you ended up suffering repossession you would lose a good deal more. Of course, you need to market it effectively, changing agents if necessary.

Or, you could seek to remortgage. Perhaps your current lender offers buy-to-let mortgages, so you could transfer to one of these. Other lenders might be more helpful, although you would need a fairly hefty deposit to move to a BTL with a new lender.

If neither of these work out, you will have to re-think your study plans. Surely there is a half-decent university close to you, and in any case the (excellent) Open University is near to you wherever you are.

minimike2 · 8 July 2008 at 11:53AM

Slap on the wrist? They might force you to swap to a BTL product? Its hard to say really. Do you know if your lender offers BTL?

grogdog · 8 July 2008 at 12:04PM

voyager, rent it out and dont worry , how will they find out?, if they do plead ignorance they will just move you to a btl rate.

quickquestion_3 · 8 July 2008 at 12:04PM

Hi there,
I cannot attend a local uni as the degree is only offered in Northern Ireland.
I had thought about the mail, but was planning to get this re-directed.
If I was to change to a buy to let mortgage I would need to do this asap before I leave full time employment. I suppose I should look into this option - My bank did not offer it, I know they do, but the lady I spoke to would not offer it - I suppose they are being extra careful in the credit crunch.
Any suggestions on good lenders for buy to let?

thanks for your speedy replies

Cat695 · 8 July 2008 at 12:05PM

surely if you only rent a ROOM out!!!! you would not be breaking your T&C's as this is not renting the house out!!! it really depends how you word things!!!

renting a room out and renting your house out are two different things....i hope you realise where i'm coming from!!!

and loads of people do it!!! and i fully intend to do it when i buy

quickquestion_3 · 8 July 2008 at 12:07PM

Hi Cat 695
It's a one bedroom flat. so, they might think that's a bit strange!
I have decreased the asking price way way down to the bare minimum and still no viewings. I don't think that this is based on the price - lots and lots of similar properties online. If I had time I would go to another estate agents, but time is ticking. Loudly!!

Dan_Collins_2 · 8 July 2008 at 12:16PM

Rent it out! They would lie to you if they could get away with it!

If you pay your mortgage each month no probs, dont worry. The banks of this country have us by the balls and have put us in this position so sod them!

Cat695 · 8 July 2008 at 12:17PM

quickquestion wrote: »

Hi Cat 695
It's a one bedroom flat. so, they might think that's a bit strange!
I have decreased the asking price way way down to the bare minimum and still no viewings. I don't think that this is based on the price - lots and lots of similar properties online. If I had time I would go to another estate agents, but time is ticking. Loudly!!

Yes but you still have a front room that you can live in!!! i really wouldn't worry and i can't see them demanding full repayment of the house as they would be out of pocket if they repossed if you did get caught.....it just depends who your renting it to!!!

Will they find out

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