Consent to lease mortgage

highandwild

I have had to move temporarily to another county to receive the medical care I need and therefore I had to rent my house out to pay for this.

My endowment mortgage only has 16 months to go and costs me £117.50 in interest each month. I am up to date on my payments.

I need to have a consent to lease mortgage and have been put under considerable pressure by the Halifax to sign up for this but they will not address the percentage increase that they want to charge me for the privilege.

The Halifax seems to think that I am a higher risk because I have tenants but the rent is guaranteed by the company that employ the tenant.

The Halifax have told me that I will have to pay a £999 set up fee, and extra 2.5 in interest but no final monthly figure can be provided. This will bind me into a three year fixed contract, the only consent to lease product they have.

Next August when the mortgage finishes, I will have to pay a £800 early settlement fee. To avoid this I will have to extend the mortgage by 20 months thereby incurring an extra £2350.

So, to safeguard my payments of £1880, the Halifax will be charging me £999 + £1424 + £800 = £3223. The £1880 is on top if this. The £1880 will be covered in only 9 months.

Or

£999 + £7416 = £8415. This is a massive additional amount of £6535.

Surely I should not be forced to sign into a fixed three year deal that the Halifax will need to be settled early les then half way through the three years.

Any comments?

The Financial Ombudsman will be looking into this but meanwhile how do I get the Halifax off of my back?


I am concerned that if I just refuse to sign into this that I will be penalised when I pay the mortgage off nest year.

Thanks

happybroker

You could remortgage to another lender on a buy to let.

Halifax are within their rights to refuse consent to let but I would imagine that they would be pretty keen to avoid the dire publicity a story in the paper about how they are trying to take advantage of some one in your situation would bring.

Might be worth mentioning I suppose.

getmore4less

Have you let the place without consent?

This may be a breach of the T&Cs

This may give them te option to call in the loan now.

I don't see why halifax can't make the terms up for you running a busines.

options/costs

What will the endowment pay out now?
How big is the mortgage? (assume interest only?)
Current rate?
Any overpayment penalties on the current deal?
Rent?

Any overpayments on the offer.
What are the overpayment penalties

Not sure that you have the costs correct
Most(all) of these costs can offset against the tax on the rent

highandwild

They are not refusing consent to lease but say that I have to pay these massive amounts of money for the privilege but are not prepared to document the amounts I will have to pay.

When they have documented the amounts I then have a document with which to embarrass them in the press. I already have a TV company keen to make a documentary about my NHS experiences.

I have had to block their phone number on my phone.

They say that it is all about risk but there is no evidence that people in my situation, with such a low monthly repayment, pose any risk to them at all.

Maybe I should open a credit only account at the Halifax containing the outstanding balance on the mortgage and pay the repayments from that each month. Zero risk then.

Maybe I should place a request in the national papers for help.

highandwild

Gtmore4less

There are times in life that you have to just do things even if they are not good. I battled for 9 months to get the health care I needed where I had lived for 25 years but no luck. I was offered help elsewhere.

Some days I just cannot get out of bed.

The terms and conditions of the mortgage state that I have to tell them that I am renting the property out. These have not been superceded since 1986.

Q. What will the endowment pay out now?
A. Not quite enough to pay the mortgae of but would be cheaper than paying the extra each month and certainly for the extended period demanded by the fixed period.

Q.How big is the mortgage? (assume interest only?)
A. £28000

Q.Current rate?
A. 3.2%

Q. Any overpayment penalties on the current deal?
A. No

Q. Rent?
A. £575 per month

Q. Any overpayments on the offer.
A. No

Q. What are the overpayment penalties
A. N/A


Most(all) of these costs can offset against the tax on the rent

I'm aware of this and I have a good accountant friend.

Thanks

getmore4less

These are the numbers I get for the move to the 3y fix.

£28000 @ 3.2% Interest only £75pm (is the rest the endowment payment?)

£28000 @ 5.7% interest only £133pm (repayment £848)

So if you move to the 3y fixed rate this costs £58pm more

Total cost over 3 years £999 + £2088(36*£58) £3087

There are no other costs you have moved to a 3y fix.

Offset the interest on the endowment money from month 16
Say £20k for 20m @ 2% £680

So the total extra cost £2407.

Now what you could do is go part repayment using the rent and full repayment when the endowment pays out and have this paid off in the 3 years which will reduce the extra interest cost

Presumably with the rent and the endowment you will have enough to pay off the mortgage in 16month with a £800 redemption fee.

That would be £999 + £928(16*58) + £800 = £2727

Another option is cash in the endowment reduce the mortgage then go repayment on the 3y fix this will reduce the extra costs a lot.

getmore4less

OK got that wrong

the cost over 3 years should be

£999 + £928(16*£58) + £2620(20*£133) - £680(£20k @ 2% 20m) = £3867

highandwild

getmore4less

Re: £28000 @ 3.2% Interest only £75pm

£28000 @ 5.7% interest only £133pm

If these figures you have come up with are correct then how can I challenge what the Halifax are telling me?

So would there be any reason why I am being charged £117.50 per month? No disrespect to you but where can I get this figure verified?
How do you calculate these figures?

Halifax state that 5.7% amounts to £206 per month and not £133.

getmore4less

Any mortgage calculator will do I use

http://www.whatsthecost.com/mortgage.aspx

£28k * 0.032 /12 = £74.667

other costs might be
House insurance
payment protection
part repayment
endowment payment

getmore4less

Any way to go mortgage free(get them off your back)

The £1k is the main problem extra interest is not that much and well covered by te rent.

How short are you if you cash in the endowment now?

Any way to raise the short fall with a lo or other debt,cover that with the rent.

What about 6/12 months rent up front for a discount would that help?

highandwild

getmore4less

The only way to go mortgage free is by selling the house and in my current state of health I do not feel that that is a good option. I may need somewhere to live longer term and I will not get another mortgage at the moment.

The £1k fee is covered by the rent but so is my rent where I live.

I could sign the three year agreement, pay the increased rate of interest until July next year, settle up early when the endowment matures pay and then pay the early redemption fee. Halifax will not tell me if there will be any other fees or ensure that there will not be any fees that I have not been told about. How crazy is that?

It is against Halifax policy to lock a customer into an agreement with a early redemption fee when this is inevitable at the onset. They have not referred to their own policy.

The endowment is about £5000 short

No chance of a loan.

No chance of 6/12 months rent up front as the tenancy is a two month rolling agreement and tenants could leave before the end of the 6/12 months.