should we rent out our home to become mortgage free

claire44_2

may partner and I owe £72000 on our mortgage and have the same amount in debt! I know we are paying it off at £300 per month through a debt managemnet plan.

We were concidering an IVA, paying the £300 per month for five years then remortgage for approx £40-£50,000 as it is expected that house prices were increase by 25% I have seen on one site and our house at present is worth £110,000 - £115,000.
As I see it we would be in no better situation as we would have to remortgage extra £50,000 plus by then we will probably owe around £68,000, on our existing mortgage, the house only cost us £50,000 back in 1999.

What a mess, anyway we have never missed a mortage payment in the ten years, our situation changed when my partners employer reduced his weekly wage by £100, for the same amount of hours, so we went self employed and for the past year customers are dropping!

We have been seriously considering renting out our home and living in a caravan for the next five years so that we can save what money we do earn to pay off our debt in five years without having to remorgage which will be higher than the rate we are on because we wil have done a IVA.

Our problem is we don't want to tell our mortgage company as we are affaraid that they will chaneg our mortgage as a buy to let which will be more expensive that's if they give us one because of our situation. Can we still rent it out, we will obviously get the correct checks done on all gas appliances and Part P on electrics.

We currently bank with the Yorkshire Building Society, would appreciate advice on all/any of the above.

THANK YOU

welshpolarbear

Hi Claire, sorry to hear you're having such problems, can't be a good time. I just wanted to let you know that we're going to be renting out our home and we're nervous about how this would affect out mortgage, but they have said it will be no problem to rent out and we don't need to change mortgages, we just need to inform them just before we let it out so they can provide us with a letter to confirm they are happy with us letting out and that they know about it. We're with HSBC.

Hope this helps :-)

StuartGMC

Claire
It seems you are now both looking to pull things round, so best wishes in that respect.

I would strongly advise you to think carefully about not informing all parties that you should regarding renting out the property which includes HMRC as rental is seen as income but I think you can set against mortgage interest etc. Do be very careful as you may find more issues arising by hiding this activity than overcome by taking it forward. As Welshpolarbear says, your lender may be quite relaxed about it.

You may want to post to the DFW (debt-free wannabe) board where others who have taken similar steps would be more likely to see your post?

Best wishes in resolving the situation with minimal stress for both of you.