Been refused consent to let by Halifax

beecher2

CLAPTON wrote: »

VIGILANT22 wrote: »

reread my post
I didn't say recalling in the loan is no big deal or that remortgaging would be easy

but nothing like the implications of saying they own 90% of the property which is absurd

I won't own my property until the mortgage is paid off - surely most people would say the same?

Thrugelmir

madeupname1 wrote: »

See what the response is. If its negative I would definately push them to reconsider and perhaps try to get the name of someone higher up the chain of decision making. The facts as you present them here seem reasonable and someone with greater decision making authority may reconsider. I struggle to understand why they would say no except where where is going to be some kind of deterioration in your financial situation (for example would you be quitting paid employment to move to Aberdeen?). Also find out what they do if you do let without consent. My mortgage company said that they would charge an additional 1% on the interest. Even with that charge, the mortgage was still affordable. In my case it didn't come to that and I was moving through choice.

Why? The whole basis of the relationship between the borrower and lender is changing. In effective the lending is moving onto a commercial basis with all the risk borne by the lender.

The downside of deception is that it will leave a permanent mark on your credit record. Large organisations do share data. As despite being in competition with one another, no one likes a bad debtor that can avoided.

Many people think renting out property is merely a matter of collecting money. When it goes wrong, and the situation isn't managed properly then it can be very expensive to the pocket.

With only 10% equity. A combination of higher interest rates and therefore lower house prices would soon cause any paper profit to evapourate.

Kerry12345

Thrugelmir wrote: »

The downside of deception is that it will leave a permanent mark on your credit record. Large organisations do share data. As despite being in competition with one another, no one likes a bad debtor that can avoided.

A friend of mine has got a deception mark on her credit file. She recently tried to move her current account to another bank and they refused to take her. She didn't want a loan from them, just an account with no overdraft and the answer was still no.

If you live with someone with bad credit, they inherit the bad credit too. You don't inherit their good credit.

madeupname1

Thrugelmir wrote: »

Why? The whole basis of the relationship between the borrower and lender is changing. In effective the lending is moving onto a commercial basis with all the risk borne by the lender.

The downside of deception is that it will leave a permanent mark on your credit record. Large organisations do share data. As despite being in competition with one another, no one likes a bad debtor that can avoided.

Many people think renting out property is merely a matter of collecting money. When it goes wrong, and the situation isn't managed properly then it can be very expensive to the pocket.

With only 10% equity. A combination of higher interest rates and therefore lower house prices would soon cause any paper profit to evapourate.

Why did I suggest that she ask the Bank to reconsider in the event of a negative response? Because there is no harm in it. The worst they can say is no. My point was more that she shouldn't just accept an uneducated no based on the fact that she doesn't fit into some guideline about being married to her partner. She should point out all the matters she has raised here, including having been with her partner for 10 years and moving to a better paying job.

It seems to me that there is a difference between going to a bank on Day One to ask for a BTL mortgage and going to the bank on Year 2 and asking for consent to let because of a change in circumstances. On Day One the bank hasn't loaned you any money and if they wish to refuse you the BTL mortgage, they haven't lost anything and they have no exposure to you. However, when they have already loaned you money to refuse to consent to the let doesn't make any sense. The refusal to consent doesn't reduce their exposure to you - if anything a refusal to consent makes her cash situation worse because she is without the rental income. There is also no guarantee that even if she were to seek to sell the property she would do this with a few weeks or even months, so why is this necessarily the better option?

Of course emmajayne is seeking to change the terms of a contract that has been agreed with the lender, but there is nothing wrong with that. She is entitled to and they are entitled to say no. I don't have a view about deceiving the bank. Personally, its not something I would feel comfortable doing but I suspect that the reality is that loads of people do it and I doubt this leads to mass repossessions. As I explained earlier, when I asked my lender what would happen, they told me they would charge 1% on the interest.

Finally I accept the points raised about the costs, regulations and risks associated with letting. Ideally you should be making a month to month return on it. However, the world doesn't end if you don't provided you are not reliant on the rental income to cover your costs. My view of renting is that it is a long term investment done primarily for capital appreciation rather than month to month income.

new_home_owner_3

Another tip if you are going to take out a residential mortgage and have the intention of renting out in the future ask if it will be possible when you sign for the mortgage and ask for a copy of the terms.

When i took my mortgage out they said it would be no problem and all i would have to do is pay a one off fee of 199 pound, that was until i came to do it, anyway after a few complaints and threat of the financial ombudsman they had to honour what they had offered and told me i would get.

They came out with things like i havent had the mortgage for 12 months, then they said the terms had changed and they was adding 1 percent.

Its just another way for the banks to make money for not doing anything extra, how can they justify adding a percent just because you want to rent your house out, the bank arent taking the risk you are, especially if you have 25% equity which they give you consent to let if you do.

new_home_owner_3

Thrugelmir wrote: »

In the same way you are happy to take risks. There are tenants that will happily screw you over given half the chance. You may find evicting tenants more costly than you realise.

If the tenants have not checked the landlord has had permission, and the mortgage company decide they want them out they can get them out imediately, thats why you have miss moneypenny going on about it all the time.

The mortgage company would not throw the tenants out if they are paying the mortgage, and they would usually come to a arrangement with the tenants, but that would only be the case if the tenants where not paying the landlord, and if they arent going to pay the landlord why would they pay the mortgage provider?

new_home_owner_3

Thrugelmir wrote: »

Why? The whole basis of the relationship between the borrower and lender is changing. In effective the lending is moving onto a commercial basis with all the risk borne by the lender.

The downside of deception is that it will leave a permanent mark on your credit record. Large organisations do share data. As despite being in competition with one another, no one likes a bad debtor that can avoided.

Many people think renting out property is merely a matter of collecting money. When it goes wrong, and the situation isn't managed properly then it can be very expensive to the pocket.

With only 10% equity. A combination of higher interest rates and therefore lower house prices would soon cause any paper profit to evapourate.

your taking the risk so why should the banks make large amounts from you taking the risks, with the banks demanding people have a 25% ltv and then loading 1 percent, what risk actually are they taking? in my eyes its very minimal risk and the banks are just being greedy.

Thrugelmir

new_home_owner wrote: »

your taking the risk so why should the banks make large amounts from you taking the risks, with the banks demanding people have a 25% ltv and then loading 1 percent, what risk actually are they taking? in my eyes its very minimal risk and the banks are just being greedy.

Compared to the investor's the banks returns are minimal.

The property market may well cool off as the full impact of the recession bites. This is in part why the banks are being to harden their attitude.

You'd be very fortunate to obtain a BTL mortgage at 1% above residential rate now by the time fees are factored in.


Start with a 25% LTV. House prices fall 10%, fees 3% to sell, a few months void rental period. Soon a lot of that 25% has disappeared. Interest rates rise 1% to 2% even more equity has gone. So yes 25 % sounds great, but its only on paper. Good business people turn paper in cash.....

VIGILANT22

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

Can people with mortgages legally grant a tenancy?

Yes, but only if 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

DVardysShadow

CLAPTON wrote: »

I would be cautious about asking what they would do if you ignore their decision.. a little bit confrontational and there's still lots to play for.

I think you should take the view that this is not an optional move from choice but a forced move to enable you to have a family life with your long term partner.

Agree. I would be considering putting the place on the market at a high but not unrealistic price, making the move and then asking for permission to let if it does not sell or get viewers.