Renting My Property - What do I Tell Bank?

Gareth78

sorry!!!!!!

poppysarah

Gareth78 wrote: »

NeilInglis - I am on a 0.9% above BoE BR and paying just 140/month. I doubt i will get one as competitive if i switch, will I?

Be prepared for them to want more.

Pring

Gareth78 wrote: »

NeilInglis - I am on a 0.9% above BoE BR and paying just 140/month. I doubt i will get one as competitive if i switch, will I?

You won't get anywhere near that good. I think they'd make you move to their fixed rate product which is (I think) 5.19% for 3 years with a 999 fee at the moment. I'm in a similar position and have been trying to negotiate it but they won't budge. They've even stopped granting Consent to Lease when you're on the SVR, you have to take out the new product.

There is the option of not telling them but I'd advise against it. It's breaking the terms of your mortgage as you took out a residential mortgage and are now leasing. Not sure what happens if you get caught but I know I wouldn't want to take the risk...

JayZed

theartfullodger wrote: »

The serious trouble would be if you don't tell the lender (or rather more specifically don't get their permission) - as then if they find out they can take possession & sell the property. Not worth the risk.

Sorry, but that's utter poppycock. The lender does not have the right to repossess the property just because you let it without consent. The worst they could do would be to end the mortgage agreement and/or force you to switch mortgages.

It's true that you're in breach of your mortgage agreement if you don't inform the lender. However, in practice (at least in my experience), if you don't tell them, they'll neither know nor care - as long as you keep up the repayments, of course.

You do need to inform your insurance company, of course, but that's a completely different issue, and they don't care whether or not you have consent from the lender. However, letting management agencies often do want to see proof of the lender's consent.

If you do decide to seek consent to let, then the outcome really varies depending on the lender. Some will just charge you a small fee and allow you to let the property (temporarily, at least) while remaining on your residential mortgage; others will insist that you switch to a more expensive product; and some will simply not allow you to let the property (particularly if you have a high LTV ratio).

poppysarah

I bet bank staff are rewarded for moving people onto higher rate mortgages -
Always be honest. It helps you sleep right at night.

SouthCoast

If you are a caring, professional landlord:

Can people with mortgages legally grant a tenancy?

Yes. But only if only their mortgage deed says it is allowed and/or they have their lender's permission. Most mortgage agreements do not allow tenancies to be granted without permission, and many lenders will try to repossess the property if they find out that this has happened.

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http://england.shelter.org.uk/get_advice/eviction/repossession_by_a_landlords_lender

SouthCoast

Four leading housing charities today launched a joint campaign to win better protection for tenants who face sudden homelessness because their landlord is repossessed.
Shelter, Citizens Advice, Crisis and the Chartered Institute of Housing (CIH) are raising the alarm over growing numbers of private tenants who face eviction with little or no warning, and through no fault of their own, because their landlord has defaulted on mortgage payments and the lender has taken possession of the property.
The organisations are calling for a change in the law which would mean courts would have the power to defer the possession to allow the tenant to find other suitable accommodation.

http://www.citizensadvice.org.uk/press_20090327

MissMoneypenny

JayZed wrote: »

You do need to inform your insurance company, of course, but that's a completely different issue, and they don't care whether or not you have consent from the lender.

Unless you need to make a claim on your insurance. Then they will be looking for a way not to pay you and not having your mortgage lenders permission to let, will do them just fine.

franklee

JayZed wrote: »

It's true that you're in breach of your mortgage agreement if you don't inform the lender. However, in practice (at least in my experience), if you don't tell them, they'll neither know nor care - as long as you keep up the repayments, of course.

What is your experience you mention?

I'd bet that during the boom years lenders didn't care, there was little to lose.

But now the plight of tenants evicted without notice due to repossession and no consent to let is getting a lot of news and now the risks to the lender are higher.

The rules are due to be changing in April as far as I've read and more responsibility for this put on lenders.

I'd expect them to be getting more picky by writing to the occupier and clamping down on this. I expect tenants to be getting more aware of the issue too and asking for proof of consent and grassing up landlords without it.