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Want to rent my flat, but no buy-to-let mortgage...?
LouC
Posts: 29 Forumite
Hi everyone
I'm going away for a while and want to rent my place. My mortgage is with Halifax. It's a standard fixed rate, expiring Feb 2010. The % is 5.8.
Do I need to tell the Halifax about this? Even if I can get away without having a BTL mortgage, I take it my building's insurance will be invalidated it tennants are living there instead of me (eg if it burns down)...?
I've just been on to Halifax's website, and they have this to say: "
[FONT=Arial, Helvetica]Leasing /renting out a property[/FONT]
[FONT=Arial, Helvetica]If you want to lease / rent out your home to somebody else, you'll need to see one of our Mortgage Reviewers to discuss this as it is subject to our agreement. Our reviewer will advise you if we agree to the proposed letting and what our requirements are.[/FONT]
[FONT=Arial,Helvetica]"
Has anyone been in the same situation? I don't mind paying a bit more for the mortgage, but don't want to be lumbered with a 2.5% fee (Halifax's current fee for a BTL mortgage - as well as 6.5%+ rate!)
As it's only a year it may be worth risking it....But what happens if the place burns down? Will Halifax come after me for the rest of the mortgage?
Any advice would greatly appreciated
Lou
[/FONT]
I'm going away for a while and want to rent my place. My mortgage is with Halifax. It's a standard fixed rate, expiring Feb 2010. The % is 5.8.
Do I need to tell the Halifax about this? Even if I can get away without having a BTL mortgage, I take it my building's insurance will be invalidated it tennants are living there instead of me (eg if it burns down)...?
I've just been on to Halifax's website, and they have this to say: "
[FONT=Arial, Helvetica]Leasing /renting out a property[/FONT]
[FONT=Arial, Helvetica]If you want to lease / rent out your home to somebody else, you'll need to see one of our Mortgage Reviewers to discuss this as it is subject to our agreement. Our reviewer will advise you if we agree to the proposed letting and what our requirements are.[/FONT]
[FONT=Arial,Helvetica]"
Has anyone been in the same situation? I don't mind paying a bit more for the mortgage, but don't want to be lumbered with a 2.5% fee (Halifax's current fee for a BTL mortgage - as well as 6.5%+ rate!)
As it's only a year it may be worth risking it....But what happens if the place burns down? Will Halifax come after me for the rest of the mortgage?
Any advice would greatly appreciated
Lou
[/FONT]
0
Comments
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Hi,
You must tell them, many lenders are reasonable regarding this and will simply keep things as they are.
However, don't just not tell them!0 -
You should ask your lender, to not have permission would be a breach of your mortgage terms and conditions (though not fraud as you didn't apply for the mortgage with the intention of letting your property). That said, if you ask anonymously and don't get the reply you want, or don't ask, you will be in the company of many people who let without asking.
On the insurance front. It is important to have the correct insurance. No reason why you cannot have insurance that allows the property to be tenanted without the correct mortgage. Try directlineforbusiness.com or alanboswell.com.
If you did let without permission, your tenants have less rights if the lender repossessed. On the other hand presumeably you are less likely to be repossessed if you have rental income than if you leave the property empty.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0 -
I've known of clients been given consent to let by HBOS and allowed up to 3 yrs to covert to a BTL0
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This is very common in the current market and I dont think they will refuse your request.0
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Many thanks for everyone's answers
My only concern with telling them is that they will try and charge an extortionate amount for the facility of converting the mortgage. It's a 3% fee to buy it out (approx 7k), so i'd be over a barrel...
Has anyone had any experience of asking their lender the same thing?0 -
I think you will find its ok with them - give them a ring.0
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As ive just found out with my mortgage company NR....you have too have sufficient income too cover 120% of the mortgage and the loan too value of the mortgage must need exceed 70%.:rolleyes:
No good for me then with my 100% morgage.
0 -
Also tell you Insurer0
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Many thanks for everyone's answers
My only concern with telling them is that they will try and charge an extortionate amount for the facility of converting the mortgage. It's a 3% fee to buy it out (approx 7k), so i'd be over a barrel...
Has anyone had any experience of asking their lender the same thing?
Don't ask them to convert the mortgage. What you're asking for is "permission to let" on your residential mortgage.
Most banks will consider it, and let you rent it out for a fixed period (1 year, 3 years, whatever they decide) without changing your mortgage. Once that time runs out you could either sell the place, live there again, or pay at that point to convert to a BTL mortgage (bearing in mind you'll need sufficient equity in the property to do so).
I'm a little confused about your insurance - is your flat freehold? If it's leasehold, you should only have contents insurance anyway. Assuming it is freehold, you will need buildings insurance designed for landlords. Try calling your company and finding out if they'll cover it, if not search the forums or google for insurance companies that deal with landlords.
Also search on here for posts from other first time landlords - obviously there's all the stuff you need to do in terms of gas certificates, deposit protection, etc etc.0 -
The mortgage is with Halifax
Just spoken to them - the choices are:
1. To move to a consent to lease mortgage at +1% for 3 more years (my current mortgage runs out Feb 09) + admin charge, which works out at an extra 5k
2. To pay off my mortgage and move to their variable rate - which will cost me 7k (3%)
The b**tards!
I'm going to have to rent it without telling them and keep my fingers crossed that nothing happens to the place...
My only concern is building's insurance: It's a leasehold owned by the council.
Is it worth taking out my own landlords building insurance? Will it be valid if there are any problems, eg, a fire?
Thanks!
Lou0
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