Consent to lease mortgage

getmore4less

Not sure if there are any other options, further thoughts

Is the endowment going to cover that £5k in 16months seems a lot to make up. maybe enough left over from the rent.

How much could you save over say 12months from rent, mortgage and endowment payments if you could raise the £5k perhaps 0% CC

Might be that a 3 year deal is more flexable anyway especialy if there is the possibility of rental voids(thats where they may see the big risk) with only 2 month rolling contract.

It might be worth a chat with a broker to see if they thing another lender could do better.
Some may want you to borrow more than the £28k
Most have high fees £1k tends to be the lower end
Rates are around the same.
It seem to be the exit fees that are the stumbling block.

Thing is it is not inevitable that you have to redeem the mortgage before the 3 years are up it is your choice. Problem it seems to be the only offer they have for lettings.


Oh one other thing

If you have been paing £115 you may owe less than the £28k now if this payment was set when rates were higher.

highandwild

I will look at this a greater detail on Monday.

I have two meetings on Wednesday, one with my bank, NatWest, and with Barclays Bank. Borrowing £28k is expensive as it is such a small amount but changing now may be cheaper.

One of the crazy things is that to cover the perceived high risk of my tenants not paying the rent they want to double the mortgage payments. I am on ESA benefit and without the tenants they would not be getting
any mortgage payments at all.

When the house was rented out there were four people that wanted to rent it as soon as they saw it on the first day it was advertised. There is very little chance of a rental void. It was my home and not a buy to let where everything is done as cheaply as possible. Three agencies were
very keen to take it onto their books as it was always going to be rented 100% of the time.

highandwild

I have spoken to the Lloyds Banking Group Media Relations Manager and have an appointment to see her soon in London soon. I will prepare a press release for that visit and if things do not go well it will go to the nationals.

To charge 550% of the amount of the mortgage outstanding in return for letting me rent the house out for 15 months is extortionate, probably illegal and certainly immoral considering the circumstances.

Which paper is it best to go to first?

Sunshine12

highandwild wrote: »

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

OP, I came across this when searching as am about to post about a consent to lease mortgage (also with Halifax.) Just for info the one they offered me today was a 3 year tracker (but with no early redemption penalty as I specified to them that I would not be renting for 3 years as was not happy to take any product with a tie in) at a rate of 5.19% above base with a £600 arrangement fee. Your figures look pretty much same as mine although not sure if you have a higher LTV or not (my mortgage is £32k and rent will be around £575 pcm. Interest only payments would be £151) They offered me this product this afternoon (or an alternative fixed rate with a 3 years tie in which is no good and sounds like the one that you were maybe offered) He printed me off all the details so if you need any more info give me a shout.

highandwild

Sunshine12 wrote: »

OP, I came across this when searching as am about to post about a consent to lease mortgage (also with Halifax.) Just for info the one they offered me today was a 3 year tracker (but with no early redemption penalty as I specified to them that I would not be renting for 3 years as was not happy to take any product with a tie in) at a rate of 5.19% above base with a £600 arrangement fee. Your figures look pretty much same as mine although not sure if you have a higher LTV or not (my mortgage is £32k and rent will be around £575 pcm. Interest only payments would be £151) They offered me this product this afternoon (or an alternative fixed rate with a 3 years tie in which is no good and sounds like the one that you were maybe offered) He printed me off all the details so if you need any more info give me a shout.

Thanks Sunshine

My mortgage is £28k, rent £575 per month and LTV is probably about 1/5 or 1/6.

What is interesting is they state that they need to charge more to cover the risk but there is more risk of not being able to pay the mortgage if they increase the amount due by 550%.

I do not know how long I will need to rent the house out for. When I am well enough to move back to an area that has no health care for me then I may consider it, certainly no sooner.

Halifax have not offered me a deal without a tie in for the three years. They say that it is not possible. They are not able to provide me with any paper work / official quote / key facts illustration as they are obliged to do so. Who would sign any contract without knowing the cost and conditions?

They have a policy of not signing deals where it is known at the onset that the customer will need to redeem early.

I would be interested to see your printout as that will give me a clue as to what I am looking for.


HighAndWild.

Sunshine12

highandwild wrote: »

Thanks Sunshine

My mortgage is £28k, rent £575 per month and LTV is probably about 1/5 or 1/6.

What is interesting is they state that they need to charge more to cover the risk but there is more risk of not being able to pay the mortgage if they increase the amount due by 550%.

I do not know how long I will need to rent the house out for. When I am well enough to move back to an area that has no health care for me then I may consider it, certainly no sooner.

Halifax have not offered me a deal without a tie in for the three years. They say that it is not possible. They are not able to provide me with any paper work / official quote / key facts illustration as they are obliged to do so. Who would sign any contract without knowing the cost and conditions?

They have a policy of not signing deals where it is known at the onset that the customer will need to redeem early.

I would be interested to see your printout as that will give me a clue as to what I am looking for.


HighAndWild.

Well I dont even have a job and they didnt say anything about risk to me. All they asked was how long I would be renting (I said standard short assured tenancy but would review following initial 6 months), they initially offered me 3 year fixed and I say no way would I take any product with a tie in then they offered me the tracker with £600 arrangement fee which they will just add into my loan. They gave me a full costing sheet telling me how much my mortgage would be per month based on this as well as the overall cost based on my term time. Im not on an endowment mortgage so Im wondering if that has anything to do with it (although seems really strange to me.) Let me hunt out the paperwork they gave me and if there are any product codes or anything on it Ill post on here. Might be tomorrow morning though.... (p.s My LTV is also around 1/5th so it cant be because of that)

highandwild

I had a long conversation with my bank manager yesterday and she things that they are putting me on a new product, which they are, instead of just giving me consent to lease. She thinks that they are confused about the two. This would not surprise me as the only people I get to talk to seem to have limited product training.

Other lenders just charge a £100 fee for example, ensure that there is a tenancy agreement in place, that there is a gas certificate and landlords insurance.

Thrugelmir

highandwild wrote: »

I have spoken to the Lloyds Banking Group Media Relations Manager and have an appointment to see her soon in London soon. I will prepare a press release for that visit and if things do not go well it will go to the nationals.

To charge 550% of the amount of the mortgage outstanding in return for letting me rent the house out for 15 months is extortionate, probably illegal and certainly immoral considering the circumstances.

Which paper is it best to go to first?

Suggest you move lender. Your current lender is not under obligation to offer anything, other than its standard product. If it doesn't fit your requirements look elsewhere. As a customer you can only vote with your feet.

No wish to sound harsh.

Sunshine12

highandwild wrote: »

I had a long conversation with my bank manager yesterday and she things that they are putting me on a new product, which they are, instead of just giving me consent to lease. She thinks that they are confused about the two. This would not surprise me as the only people I get to talk to seem to have limited product training.

Other lenders just charge a £100 fee for example, ensure that there is a tenancy agreement in place, that there is a gas certificate and landlords insurance.

They told me that they need to put me on a new product as I cant stay on the variable that Im on just now and those terms were part of the consent to lease. I hunted out that paperwork from yesterday. The Product code is CLA839 (Tracker 5.19% above base - no tie in - drops to 3.99% above base after 3 years.) On a £32k mortgage interest only, payments per month are £151 approx. Let me know how you get on, Id be keen to know if there is another option also as I dont particularly want to pay a £600 arrangement fee for the priviledge of them increasing my payments!!

Im about to look into changing lender but once I add up arrangement fees and survey fees there probably wont be much difference.

highandwild

Sunshine12

Thanks for that information. I will do some more research this weekend.

Halifax have two weeks to provide me with the exact costs in writing, the terms and conditions and a signed agreement that there will not be any hidden fees.

They have had a year to do this whilst still complaining that I have not got consent to lease.

After two weeks it goes to the Financial Ombudsman.