Emirgrating but renting our house out - Mortgage Questions?

NatD1978

Hi, I was wondering if anyone could offer any advice with regards to our situation. I have been offered a job, and my wife and I move out to Doha in Qatar in the Summer for 3 years.

We will be renting out our house, have a letting agent on board, and are close to getting a tenant.

However, after doing a bit of digging, it appears we need to change our mortgage. We are currently on a SVR mortgage with Halifax with no term agreed, and they have just quoted us prices that increase our monthly payments by £200 per month!!!!!!!

I was wondering if we actually need to even change our mortgage (we will be changing our insurance) and if we do, can you recommend any mortgage products / mortgage providers worth speaking to?

Also, having read in another post about claiming tax back as an ofset against the interest on the mortgage. How would that work?

Just a bit of information as well about our circumstance - we will not be residents of the UK for the next 3 years, will not have any taxable UK income and the rent does not cover the mortgage.

Any advise / help you can offer would be greatly appreciated.

Thanks in advance.

Sammy85_2

You either need to get a BTL mortgage (which im assuming is what halifax has offered you) or you need a Consent to Let on your current mortgage. Some banks give consent for free, some make a charge and some also put a time limit on them, usually 1-2 years.

puddy

whats the rate on the produce the halifax are now offering you (the one that increases your payments)?

then find a BTL mortgage with less rate and without too hefty an arrangement fee

wodgerdodger

Would Halifax not just require "Consent to let" as its a job move? You also need to apply to revenue for NON RESIDENT LANDLORD status so that rent can be paid to you gross rather than tenant deducting and paying to IR.

wodgerdodger

Just re read yoru thread and noticed rent does not cover mortgage, is it interest only or repayment?

You will have tax liability for the rent hence my reply regarding NRL status, you only get relief against the interest so would be better to switch to Int only if halifax would allow. You can offset various costs such as management/letting fees, repairs but not betterment also buildings insurance. On this last nit you will need to alter to a landlord policy as wouldnt be covered under normal residential buildings policy.

You may also want to consider rent gaurantee insurance , when we let ours whilst abroad Letting comapny included this free within full management cost.

Onelast word of warning. We left quite a few personal items in the loft of our house which subsequent tenants obviously went through much to our dismay but now ay of proving who or when. So make sure you dont leave anything you may want on your return...not all tenants will treat your home as you would nor respect personal property!

housebuyer_abc

wodgerdodger wrote: »

Just re read yoru thread and noticed rent does not cover mortgage, is it interest only or repayment?

You will have tax liability for the rent hence my reply regarding NRL status, you only get relief against the interest so would be better to switch to Int only if halifax would allow. You can offset various costs such as management/letting fees, repairs but not betterment also buildings insurance. On this last nit you will need to alter to a landlord policy as wouldnt be covered under normal residential buildings policy.

You may also want to consider rent gaurantee insurance , when we let ours whilst abroad Letting comapny included this free within full management cost.

Onelast word of warning. We left quite a few personal items in the loft of our house which subsequent tenants obviously went through much to our dismay but now ay of proving who or when. So make sure you dont leave anything you may want on your return...not all tenants will treat your home as you would nor respect personal property!

They had full and private enjoyment of the property as tenants so they can go through what they want, you shouldn't have left the stuff there

housebuyer_abc

wodgerdodger wrote: »

Just re read yoru thread and noticed rent does not cover mortgage, is it interest only or repayment?

You will have tax liability for the rent hence my reply regarding NRL status, you only get relief against the interest so would be better to switch to Int only if halifax would allow. You can offset various costs such as management/letting fees, repairs but not betterment also buildings insurance. On this last nit you will need to alter to a landlord policy as wouldnt be covered under normal residential buildings policy.

You may also want to consider rent gaurantee insurance , when we let ours whilst abroad Letting comapny included this free within full management cost.

Onelast word of warning. We left quite a few personal items in the loft of our house which subsequent tenants obviously went through much to our dismay but now ay of proving who or when. So make sure you dont leave anything you may want on your return...not all tenants will treat your home as you would nor respect personal property!

You won't get a consent to lease from Halifax unless the rent is 125% of the mortgage payment, you will also need at least 85% LTV i.e. 15% equity. Furthermore if you tell them the truth they won't give you the product anyway as the consent to lease can only be for a period of under 3 years and you need three.

Secondly rental guarantee is essential when we did what you are proposing we ended up beiung owed over 3000 pounds and had to go to court etc etc to get the cash 11 months later

Fire_Fox

wodgerdodger wrote: »

Onelast word of warning. We left quite a few personal items in the loft of our house which subsequent tenants obviously went through much to our dismay but now ay of proving who or when. So make sure you dont leave anything you may want on your return...not all tenants will treat your home as you would nor respect personal property!

The minute you let out a property it ceases being your home and becomes the tenants' home. Tenants rent the whole house not just the parts you haven't filled with your belongings: it is no more acceptable to leave personal items in the loft that in one of the bedrooms.

NatD1978

Thanks for all the replies - just found a thread from a chap who is also with the Halifax.

My wife had a meeting with the Halifax today, and at no point discussed the Consent to Let agreement, but instead tried to sell us a BTL mortgage.

Exact figures though with regards to interested rates and product offered, I am not sure. I think our biggest problem is that we are just on the SVR, and not tied into a fixed rate agreement.

We have a repayment mortgage, and with £5k that we want to pay before we go, we should be under 75% LTV which is where we need to be (as a minimum). We are planning to be away for 3 years at the moment.

Just to give you guys firgures so you understand a little more. Current Mortgage payment is £680 a month, we have 20 years left. We will be getting a rental of £695pcm (but this is -10% management fee from the Agent) giving us around £625 rental income.

wodgerdodger

Fire_Fox wrote: »

The minute you let out a property it ceases being your home and becomes the tenants' home. Tenants rent the whole house not just the parts you haven't filled with your belongings: it is no more acceptable to leave personal items in the loft that in one of the bedrooms.

Yes we were naive and thought "respectable" tenants would not deliberately rifle through items which were clearly tucked way to one end of loft space with the whole remainder of the loft vacant.

Didnt realise that from your interpretation that allows them the right to remove (steal) these items would that also apply to anything else in the property theyu fancied? kitchen units , curtain rails.
Quiet enjoyment is not harrassing, allowing them to live as if their own home.

Perhaps my values are different from a different age group.

Fire_Fox

wodgerdodger wrote: »

Yes we were naive and thought "respectable" tenants would not deliberately rifle through items which were clearly tucked way to one end of loft space with the whole remainder of the loft vacant.

Didnt realise that from your interpretation that allows them the right to remove (steal) these items would that also apply to anything else in the property theyu fancied? kitchen units , curtain rails.
Quiet enjoyment is not harrassing, allowing them to live as if their own home.

Perhaps my values are different from a different age group.

As you did not mention your possessions being stolen in the earlier post, it's rather a leap of faith to suggest 'my interpretation' condoned that! Unfortunately some tenants do remove (steal) or damage fixtures, fittings and furniture, therefore there is a perfectly good system in place to protect the landlord - a dual signed inventory and deposit or bond.

Does your age group think it is acceptable to enter a profession which has as much power as a landlord without bothering to appraise yourself of your legal rights and responsibilities? If there were items in the property not listed in the inventory you leave the innocent tenant wide open to erroneous accusations, as well as yourself wide open to the crooked tenant helping themselves.