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Renting our House Short Term
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Charlie007_2
Posts: 20 Forumite
Hello there, any advice would be gratefully received as I am going out of my mind.
Remortgage our house in September of last year after failing to sell the property, so until house prices recover (like most people we are stuck with a rather large mortgage). Remortgaged at 95% so very little equity (if any) in the property. Anyway could just about cover mortgage, bills, costs of lving etc with my wage & my partners wage, all good, until she lost her job.
We tried to manage and we started to use savings & overdraft to pay the monthly bills. We decided the best plan was to move out back to our parents houses, at least we would not not incur high bills, food etc and we could just concentrate on paying the mortgage.
I decided (trying to be helpful) to rent out the property as I knew it would be short-term (until at least June '09), as this would help pay towards the mortgage etc. And we could concentrate on paying back the overdraft, credit etc whilst my partner searches for a new job.
We have been doing this since Nov '08, and until now the Mortgage & Insurance has all been paid in full on time. We anticipate that all being well we should be okay to move back into the property May/June '09, but I am
worried that I am deceiving my mortgage company.
I know I am not breaking the law!! , but that I maybe in breach of my mortgage terms & conditions. We make no profit from the tenants, in fact there is still a shortfall of around £150 a month which we pay.
Yes we though we could cope with the mortgage etc, credit & bills etc, but like most people found it all too much. We are seeing the light at the end of the tunnel now and cannot wait to move back into our house.
Can anyone help or advice me please of what to do. Do we carry on until May/June not telling our mortgage company ? Or do we try to tell them & explain. I am worried they will put us on a SVR, and again we will struggle because at the moment we are on a Tracker (very lucky I know).
What are the consequences if they found out ??
Please, we are desperate for some sensible advice.
Remortgage our house in September of last year after failing to sell the property, so until house prices recover (like most people we are stuck with a rather large mortgage). Remortgaged at 95% so very little equity (if any) in the property. Anyway could just about cover mortgage, bills, costs of lving etc with my wage & my partners wage, all good, until she lost her job.
We tried to manage and we started to use savings & overdraft to pay the monthly bills. We decided the best plan was to move out back to our parents houses, at least we would not not incur high bills, food etc and we could just concentrate on paying the mortgage.
I decided (trying to be helpful) to rent out the property as I knew it would be short-term (until at least June '09), as this would help pay towards the mortgage etc. And we could concentrate on paying back the overdraft, credit etc whilst my partner searches for a new job.
We have been doing this since Nov '08, and until now the Mortgage & Insurance has all been paid in full on time. We anticipate that all being well we should be okay to move back into the property May/June '09, but I am
worried that I am deceiving my mortgage company.
I know I am not breaking the law!! , but that I maybe in breach of my mortgage terms & conditions. We make no profit from the tenants, in fact there is still a shortfall of around £150 a month which we pay.
Yes we though we could cope with the mortgage etc, credit & bills etc, but like most people found it all too much. We are seeing the light at the end of the tunnel now and cannot wait to move back into our house.
Can anyone help or advice me please of what to do. Do we carry on until May/June not telling our mortgage company ? Or do we try to tell them & explain. I am worried they will put us on a SVR, and again we will struggle because at the moment we are on a Tracker (very lucky I know).
What are the consequences if they found out ??
Please, we are desperate for some sensible advice.
:T Charlie007
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Comments
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Sometimes you just do what you can to survive.
If they found out the worst they might do is put your interest rate up - they won't do any worse than that. The fact that it is only a temporary arrangement until you find your feet again may actually mean that they might not do anything at all if you told them and could show that it wasn't bought as a BTL property.
Don't worry too much. What I say isn't exactly from the rule book but I'm sure as long as you keep paying the mortgage, they are unlikely to find out.
Everything that is supposed to be in heaven is already here on earth.
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Thankyou so much!!.
This is all I need, some plain..simple sensible advice..:T Charlie0070 -
Charlie007 wrote: »We are seeing the light at the end of the tunnel now
Make sure a train is not coming that way...
sorry sorry very inappropriate, but I would look to put it on the market asap and sell for a serious bargain.
damage limitation suggests cutting your losses before you get slapped for actually having an BTL mortgage rather than what you applied fordon't judge me - i already know my flaws0 -
Believe you me, as soon as we can, and we are back in the house, we will
reluctantly put it on the market. Thanks!!:T Charlie0070 -
We rent a house out. Got a "normal" mortgage on it, not a buy to let. It was the house I use to live in before we got married and when I informed the company there were happy for my to rent it out but made me pay a fee (about £150 from what I remember) for them to send me a letter saying I could rent it out. If I hadn't informed them I'm certain they would have never found out. I think your many problem telling your company is that they may move you onto a buy to let and the interest rates are higher on these. Personally, in your situation I wouldn't risk it if your already having to top the rent up to cover the mortgage.0
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I hope you have a decent tennant. It is surprising how much damage a bad tennant can do in a short space of time."A nation's greatness is measured by how it treats its weakest members." ~ Mahatma Gandhi
Ride hard or stay home :iloveyou:0 -
This is a classic case of sell the property and get out of the mess.
Most people who do what you are currently doing are paying their mortgage and the rent leaves a small profit.
In your situation if you come clean the bank will want to run a mile.
Call them anonymously and get an idea of their possible decision. If you name the lender I am sure a few people here will know the answer anyway.
BUT the rent is lower than the mortgage. This is dodgy ground.
I would rather give you honest advice than tell you what you want to hear.0 -
Charlie007 wrote: »I know I am not breaking the law!! , but that I maybe in breach of my mortgage terms & conditions.
I'd be more worried about the insurance, personally. Have you told them you're not living there? If not, and the tenant contrives to catch it on fire or something, they're within their rights not to pay up.Hurrah, now I have more thankings than postings, cheers everyone!0 -
This is a classic case of sell the property and get out of the mess.
The OP has done well to take responsibility minimise their losses thus far.
If they have family that they can stay with, then 150 quid lost each month for a relatively short while on what is ultimately their home is hopefully likely to cost them less than the EAs fees to sell the property, not even considering any negative equity. Selling up would simply put them in real debt, with no hope of buying again any time soon.
There's no right answer, they can't walk away totally unscathed but selling up isn't actually going to solve the problem.Everything that is supposed to be in heaven is already here on earth.
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Doozergirl wrote: »The OP has done well to take responsibility minimise their losses thus far.
If they have family that they can stay with, then 150 quid lost each month for a relatively short while on what is ultimately their home is hopefully likely to cost them less than the EAs fees to sell the property, not even considering any negative equity. Selling up would simply put them in real debt, with no hope of buying again any time soon.
There's no right answer, they can't walk away totally unscathed but selling up isn't actually going to solve the problem.
I would agree with you in general but not where the rent is lower than the mortgage - but as they are moving back in shortly its making the best of a bad situation.0
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