Mortgage advice please

bikeman17

just bought a property for 240k with a 2yr fixed rate mortgage at 4.01% interest only. On the mortgage agreement it says the property is for residential for myself. My broker didnt ask me at the point wheather I will be living or renting the place out.

I am now looking to rent the property out as my personal circumstances has changed. What are my options, can I still rent the property out, even though the agreement says I am to live there?
Also, isit too late to get a building insurance?

Please advice

_Andy_

You need to ring your lender and ask for 'consent to let' - if you've just bought it they may not be too keen on it.

bikeman17

_Andy_ wrote: »

You need to ring your lender and ask for 'consent to let' - if you've just bought it they may not be too keen on it.

what if i decide to go to an estate agent and tell them 'find a tenant for this property heres all the paper work'. Will this issue get raised up?

Boozer

bikeman17 wrote: »

what if i decide to go to an estate agent and tell them 'find a tenant for this property heres all the paper work'. Will this issue get raised up?

I think you should do it properly, if you do not, you will always be worrying about what will happen if they find out, i have been in that situation and its not worth the worry.

phlash

bikeman17 wrote: »

what if i decide to go to an estate agent and tell them 'find a tenant for this property heres all the paper work'. Will this issue get raised up?

You can do that......but

It's mortgage fraud.

If you did do that, then I hope you get caught, because it is actions like above that cause the rest of us to pay higher lending charges.

bikeman17

Boozer wrote: »

I think you should do it properly, if you do not, you will always be worrying about what will happen if they find out, i have been in that situation and its not worth the worry.

If i inform my lender, what will this mean for me. will my montly plan increase, will they reject a 'concent to let'

What is the worse which can happend if the lender knows about this?

Sorry for the daft questions as i a FTB

Boozer

There will be certain criteria you will have to meet, does the rental income from the house cover 120% of the interest only mortgage(may change with different lenders), i would imagine your rate may go up as it is a commercial mortgage rather than a residential one(think thats how it was explained to me), sure a mortgage broker will see this thread soon and advise.

phlash

bikeman17 wrote: »

If i inform my lender, what will this mean for me. will my montly plan increase, will they reject a 'concent to let'

What is the worse which can happend if the lender knows about this?

Sorry for the daft questions as i a FTB

Jail

(more characters needed for post, here they are)

bikeman17

phlash wrote: »

Jail

:mad:

crap, i would blame my advisor as he failed to has this important question.

silvercar

If i inform my lender, what will this mean for me. will my montly plan increase, will they reject a 'concent to let'

They may say no, they may allow it with a fee of say £200, they may increase the interest rate on your mortgage.

What is the worse which can happend if the lender knows about this?

Theoretically, as you have breached a condition of your mortgage, they could repossess. I have never known of anyone being repo'd who kept up with repayments on their mortgage.

[STRIKE]BTW it wouldn't be "fraud" as you obtained the money honestly, it would be a breach of your mortgage terms, so expect a financial penalty.[/STRIKE]

Actually, from other posts of yours, it is fraud - you have set out to deceive.

Whether you obtain permission or not, make sure you have the correct building insurance that allows tenants. Last thing you need is your tenants burning the place down and insurance not paying out.

If you don't tell your lender your tenants might. What happens when post arrives from the lender? Royal Mail redirect isn't fool proof.

silvercar

phlash wrote: »

Jail

(more characters needed for post, here they are)

Though a first offence for deception may just give you a large fine and community service - I hear that yellow fluorescent jackets are trendy:)