Will they find out

Trying_to_be_good

I think you'll struggle to remortgage at all, as you won't be on 95% any more (£104,500 of the £110,000 you purchased for). Instead, you'll be on £104,500 of the current value (less than £89,000), so well over 100%. You may be stuck on the Standard Variable Rate of your lender.

MissMoneypenny

grogdog wrote: »

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.

1. A letter addressed to the LL at the tenant's home (even if redirected and one slips through).

2. Anyone can got to Land Registry and download a copy of any properties deeds for £3. That will give the address that the mortgage lender has for the Landlord.

3. The tenant doesn't pay. It takes two months before you can apply to the court and then you still have to go through the motions. If the tenant pays just some of the 2 months rent arrears before court, your order will be thrown out. How long can you keep the mortgage payments up for?

Also, the tenants can sue you if they are evicted by the mortgage lender.

silvercar

Lets distinguish between two things:

Moving out of your current home and letting it while on a residential mortgage (without consent to lease) is a breach of your mortgage terms. This is a contractual matter between the lender and yourself and of no interest to anyone else (except perhaps your tenant!).

Applying for a residential mortgage with the immediate intention of letting the property is withholding material information, deception, fraud..... a criminal activity which could lead to prosecution.

Whereas there are people on here (me included) who happily say go ahead and let, worry if the lender finds out when it happens, there will be far fewer if anyone, who will say you can apply for a mortgage knowing you will immediately let the property.

MissMoneypenny

charlie1970 wrote: »

Your mortgage will go up and your insurances will too if you tell them you're renting it out. Good luck

All the good LLs on these forums say that you will need to change your insurance anyway, to a LLs insurance. What if your tenant causues a fire and you don't have the correct insurance?

How bad is the market where you are? Can you just drop to below what others have just sold for, and get rid of the place?

surreysaver

The mortgage might not be an issue if you can cover it up, but what about the insurance? If the place burns down, or gets flooded the insurance company might not want to pay up when they find out you haven't been living there for months.

quickquestion_3

Hello all,

I have looked into landlord's insurance and the quote I got was not as bad as I was expecting. I want to be clear here - I would never put any person or property in danger with inadequate insurance. I will do whatever I can by the book, I'll register and have all the safety checks etc- It's just this mortgage issue, and there isn't a lot I can do about it.

I am a mature student - I have sat A level exams this year and qualified for the university place I wanted for years. I have handed in my notice etc. the only place I can do the course is in N.Ireland. I HAVE TO MOVE!

only problem is, I can't sell my flat. So renting it out until the market improves is the only way I can see to enable me to eventually pay the bank back £104,500.
Thank you for all the advice re the dangers of what I am considering

I know that ultimately I will have to make the decision and take the risk!

G

silvercar

All the good LLs on these forums say that you will need to change your insurance anyway, to a LLs insurance. What if your tenant causues a fire and you don't have the correct insurance?l

Its a flat so building insurance is generally covered by the management company insuring the block. For any landlord contents you would need to get the correct insurance.

beecher

silvercar wrote: »

Its a flat so building insurance is generally covered by the management company insuring the block. For any landlord contents you would need to get the correct insurance.

The flat is in Scotland so I would've thought building insurance would be paid by the individual - mine certainly is.

I take it the flat is on at a fixed rate, and is on at the very least you need to be able to pay back the mortgage? Could you put it on at less and borrow the money needed to make the shortfall? My worry is that it'll take years for the value to go back up to what you need it to be and what happens if you have voids for a long period of time.

Where in Glasgow is the flat?

*jobags*

What is this degree that you can only study for in Northern Ireland?

Have you thoroughly checked the degrees available locally? - Most degrees are modular so you pick from a menu of options to build up the degree you want

Bear in mind also that basic Bachelor Degrees are 10 a penny these days and in order to really benefit in the job market from your degree you will have to do a Post Grad Diploma or Masters after graduation.
Can't you do your pet subject at postgraduate level and in the meantime just do a "somewhat related" first level degree?

That way you can stay where you are and go into the degree course relatively stress free

Sods law says your tenants will go pear shaped around exam time

Jo

bubblesmoney

high risk of repocession whether u rent it or not. reasons being -

1. fixed rate due to end in dec 08
2. 95% LTV presently based on purchase valuation nearly 2y ago
3. if u dont remortgage by dec then u will pay a much higher variable rate which u might not be able to afford especially if u become a student now and work part time
4. if u do try to remortgage after u become a student, ur earning power will be less as working part time so lenders will only lend smaller amounts based on ur paying capacity
5. also from a news article in the last few days it is clear most lenders wont lend on flats for anything more than 80% LTV infact lenders like lloyds dont give more than 65% now as per the article
6. interest only mortgage presently. all banks tightening screws now on interest only mortgages as per some news articles in the last couple of days. so again difficulty come remortgage time
7. also for new mortgage u will need a new valuation, new valuation will most likely be lesser than the value 1.5y ago when u bought the flat so u will need to cough up the difference
8. since u will be already be a student when u try to remortgage u wont be able to hide it then and getting a remortgage for most probably more than 100% LTV at present valuation for a person on part time work with lesser earnings than 1.5y ago plus for a buy to let mortgage is next to impossible i feel. so u will definitely move to a higher variable rate come dec 08 due to negative equity as no other lender will be likely to lend you money even with a bargepole distance in those circumstances

so in those circumstances u dont have much options i feel.

either forget univ study till some time later and continue working and try taking a lodger for the bedroom and live in the living room to be able to afford more equity come remortgage time, this will hopefully help u remortgage rather than continue in dec on a high variable rate which u might not be able to afford. there will still be the risk of repocession

or u can still do ur degree but u will most likely get ur flat repocessed and be in negative equity and still owe the bank money even if the flat is sold in auction, or go bancrupt eitherway ruin ur credit history for years to come and might find it difficult to get a mortgage for years to come. see link about a case where repocession occurred but even after house was sold 14y ago,they are still paying monthly dues to debtors. see link but u might have read this already

or a miracle could happen like winning the lottery or something else wonderful that people like me cannot decipher at present

harsh practical decisions to make. only u know what is right for u. best of luck what ever u choose. but please think over if the degree is really worth losing everthing u have now and more. for all u know u could still do the same degree a few years later when things are better financially for u. really hope things work out for u.