REnting out house - should I inform mortgage co?

Im-Blue

Hi

Not sure if i am posting in the right area, me and my step-brother bought a 3 bed house together 4 years ago to get onto the property ladder, we lived there for three years and had a friend/lodger in the 3rd room.

Last year we moved out with our partners and are currently renting the house out to a family... we done this privately, not thru letting agents.

We have never told our mortgage company about us moving out & renting property....

We're not profiting from the rent, well by about £6.50 a month! We just couldnt sell it at the time....

is it REALLY bad to not tell mortgage company & remain on residential mortgage? We are fixed until May 2011, if interest rates are still low could possibly go onto a buy-to-let mortgage then..(or sell up) but im worried about now till then!

tenants are pretty good by way of keeping all my post and me picking it up periodically, so slim chance of any mail being redirected back to the lender?

any advice would be appreciated!

VIGILANT22

What "advice" do you require....

I think you very well know the answer........Quote: "so slim chance of any mail being redirected back to the lender?"

Im-Blue

VIGILANT22 wrote: »

What "advice" do you require....

I think you very well know the answer........Quote: "so slim chance of any mail being redirected back to the lender?"

the advice i require is is it REALLY bad to not tell the lender?

I feel like im the only one in the world doing it, but surely it happens a lot?

Thrugelmir

And have you informed the tax authorities either?

Also you may find your landlords insurance invalid in the event of a claim.

All what if's. Depends on how much risk you are willing to take. As when something does goes wrong or catches up with you. Then the downsides will become apparent. Not least a black mark on your credit history which all major lenders will see.

surreybased

Hi,

This question is often asked - renting out a property on a residential mortgage whilst actually not living here does break the conditions of the mortage
A buy to let mortgage is usually more expensive and only available if reasonable equity in the property.

One very key point is are you maintining the property as a professional LL should i.e gas safety cert, deposit being protected, insurance? Not doing this is also very significant for you and your tenants.

Im-Blue

surreybased wrote: »

Hi,

This question is often asked - renting out a property on a residential mortgage whilst actually not living here does break the conditions of the mortage
A buy to let mortgage is usually more expensive and only available if reasonable equity in the property.

One very key point is are you maintining the property as a professional LL should i.e gas safety cert, deposit being protected, insurance? Not doing this is also very significant for you and your tenants.

yes i am, got gas safety cert, deposit is with DPS protected and I have landlords insurance (which didnt mention anything about telling the lender)

....

If i were to confess up to my mortgage company could I just say they've just moved in or is that a bad idea? i'm assuming it'll cost me a fee to come out of fixed mortgage that im currently on to go onto BTL mortgage too.

VIGILANT22

Im-Blue wrote: »

the advice i require is is it REALLY bad to not tell the lender?

I feel like im the only one in the world doing it, but surely it happens a lot?

and will that be your defence "surely it happens a lot"

from your post you're aware you should have requested permission...are you hoping someone will say it doesn't matter?

Im-Blue

Thrugelmir wrote: »

And have you informed the tax authorities either?

Also you may find your landlords insurance invalid in the event of a claim.

All what if's. Depends on how much risk you are willing to take. As when something does goes wrong or catches up with you. Then the downsides will become apparent. Not least a black mark on your credit history which all major lenders will see.

I havent actually informed the tax authorities no, but I have got money put back to pay them what I calculated I would owe...

I know it's quite irresponsible but just all happened quickly and before I knew it i was 10 months down the line.

Im-Blue

VIGILANT22 wrote: »

and will that be your defence "surely it happens a lot"

from your post you're aware you should have requested permission...are you hoping someone will say it doesn't matter?

I know, and I admit it is not a good siutation, but not really too sure how to get out of it now they've been there 10 months

VIGILANT22

Phone yr lender ask for permission.........and do as suggested above re insurance etc...By the way why are you asking now and not 10 months ago?

Im-Blue

VIGILANT22 wrote: »

Phone yr lender ask for permission.........and do as suggested above re insurance etc...By the way why are you asking now and not 10 months ago?

We moved out & tenants in quickly and i was quite naiive to the implications of my actions........ i wasnt too sure how bad it was to not tell them.

If i tell them now though, I'm worried about having to change to BTL then having to pay for last 10 months! my own fault