Can I opt out of my Halifax mortgage?

hutchbeast

Hi

I signed up to a Halifax mortgage in July 2008 on a first time buyer scheme with a high interest rate- around 6.29%. However, I split up with my girlfriend so I've been left paying the £700 repayments on my own and with the other bills I'm left with hardly any disposable income. I recently had the full mortgage switched over into my name.
I rung the Halifax and asked if I could switch to a buy-to-let mortgage and they said they couldn't see it being a problem as I met the financial criteria to do so, but then after another phone call the mortgage advisor claimed he had spoken to his manager and they'd decided to block my attempt at gaining the BTL mortgage because my house had "probably" lost 15% or more since I bought it. My personal theory is that the repayments of the BTL mortgage would have been £550 or so, and with me paying £700 at the moment this would have been bad news to them.

So what I want to know is what rights do I have? I would really to rent my house out for a year or so to free up some income but I'm being blocked from doing so.

Can I opt out of my FTB 5 year fixed mortgage? I want to avoid as many admin/opt out/arrangement fees as possible. I've heard brokers such as L&C might be good. Does anyone have any experience?

I would really appreciate any help

Thanks

Trying_to_be_good

To let your house you need either 'consent to let' with your residential mortgage (if your lender will give you this) or switch to a buy-to-let mortgage.

You can't 'opt out' of a mortgage - you can pay it off or switch to another lender, including any early repayment penalties.

Did you take legal advice when you split with your girlfriend? Who recommended you take on the whole mortgage? It's a fixed rate, so presumably you knew what the payments would be before you signed on the dotted line?

neas

i think with any fixed rate deal there is a 'opt out' fee... and not mch way around it.

Thats the whole point of fixed rate deals.... you sign up and agree the rate , for better or worse for X amount of years.

Not that helpful I know but true.

Wickedkitten

Is the mortgage a joint mortgage?

Trying_to_be_good

Wickedkitten wrote: »

Is the mortgage a joint mortgage?

OP has said "I recently had the full mortgage switched over into my name" - so it sounds like it's all just on him, though it was originally a joint mortgage.

hutchbeast

Trying_to_be_good wrote: »

To let your house you need either 'consent to let' with your residential mortgage (if your lender will give you this) or switch to a buy-to-let mortgage.

You can't 'opt out' of a mortgage - you can pay it off or switch to another lender, including any early repayment penalties.

Did you take legal advice when you split with your girlfriend? Who recommended you take on the whole mortgage? It's a fixed rate, so presumably you knew what the payments would be before you signed on the dotted line?

thanks for your replies. the situation with my ex got really messy so i got her to sign it over to avoid her messing me about further. luckily she signed it over with no real resistance. it was a joint mortgage but now fully in my name. i did this with the intention of renting the house out for a year or so so maybe i could review my finances later and possibly live there again

Dan_1976

You could just let it out!

Are you on interest only?

Anon

If you rent out without permission you could be in breach of contract? Without switching to BTL (and therefore incurring redemption penalties etc) will they not give you permission to let (on the current mortgage - though they may/are likely to add a premium onto the mortgage rate which will take your monthly payments even higher).

An alternative would be to rent a room/rooms and you still live there?

Anon

Trying_to_be_good

hutchbeast wrote: »

thanks for your replies. the situation with my ex got really messy so i got her to sign it over to avoid her messing me about further. luckily she signed it over with no real resistance. it was a joint mortgage but now fully in my name. i did this with the intention of renting the house out for a year or so so maybe i could review my finances later and possibly live there again

Lucky for her, I suspect unlucky for you. You've taken on a huge debt, probably with negative equity (so she should have paid you her half of the negative equity) on the assumption you'd be able to let it out and cover the mortgage.

Renting a room to a lodger may be the best solution.

hutchbeast

Not sure if I want to live there. I may just try and rent it out through a letting agent...it might be illegal but a lot of people seem to be at it

Anon

hutchbeast wrote: »

Not sure if I want to live there. I may just try and rent it out through a letting agent...it might be illegal but a lot of people seem to be at it

As you have flagged it with the mortgage company now, that may not be the best option. I may be wrong, but breach of t&cs may result in them recalling the loan, which could prompt the property to be repossessed and sold at a significant loss. Not switching to a BTL mortgage, but asking permission to let, may be a better option (and the best, as I mentioned above, could be to rent out a room/rooms while living there).

Anon