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Consent to lease - catch 22!!! Buy to Let with Halifax.
McPhooey
Posts: 5 Forumite
I rented out my house in June 2007, I was with the Halifax at the time and had to change my mortgage to a new 25 year buy-to-let tracker which at the time cost me £499, plus my interest rate jumped to 6.9% on a tracker. I also was given a three year "consent to lease".
Now, all has been fantastic, I have a good tenant, interest rates came down (my tracker is at 2.5% at the moment, goes to 3.5% base June 1st as the three year special period is up, but that ok).
However, the 3 year "consent to lease" is up. To get a new "consent to lease" Halifax say I also have to take a new mortgage deal. And you guessed it, the new mortgage deals are a choice of two
Fixed 3year, 5.49%, £999 fee!!! 3% redemption!
Tracker 3 year, 5.59%, £599 fee!!! 0% redemption.
Now my position is quite obvious,
1. I have a buy-to-let mortgage that I paid for already and is a better interest rate and I don't want to pay another application fee.
2. I intend to sell the house in the next couple of years so the Fixed rate redemption fee makes it a no-go.
3. Interest rates are bound to be going back up in the next 3 years. If they reach a measly 4% I'll be stuffed!!!!
4. Changing lenders is prohibitive too, all are charging extortionate fees.
I can't see why I have to take a new mortgage deal, there are no clauses in my current Halifax buy-to-let mortgage contract, or in the consent to lease contract. The only relative point is that the consent to lease 3 years expires and I have to ask for a new one!
My only real options are to check with a mortgage solicitor to see if there is a reason that I can't be forced to take a new buy-to-let. Or to pay the tracker fee and sell the house when interest rates rise, though I resent having to pay £599 to the Halifax for the privilege of being forced to sell my investment and at a time when it will be a bad time to sell!!!
Any advice would be appreciated!
Now, all has been fantastic, I have a good tenant, interest rates came down (my tracker is at 2.5% at the moment, goes to 3.5% base June 1st as the three year special period is up, but that ok).
However, the 3 year "consent to lease" is up. To get a new "consent to lease" Halifax say I also have to take a new mortgage deal. And you guessed it, the new mortgage deals are a choice of two
Fixed 3year, 5.49%, £999 fee!!! 3% redemption!
Tracker 3 year, 5.59%, £599 fee!!! 0% redemption.
Now my position is quite obvious,
1. I have a buy-to-let mortgage that I paid for already and is a better interest rate and I don't want to pay another application fee.
2. I intend to sell the house in the next couple of years so the Fixed rate redemption fee makes it a no-go.
3. Interest rates are bound to be going back up in the next 3 years. If they reach a measly 4% I'll be stuffed!!!!
4. Changing lenders is prohibitive too, all are charging extortionate fees.
I can't see why I have to take a new mortgage deal, there are no clauses in my current Halifax buy-to-let mortgage contract, or in the consent to lease contract. The only relative point is that the consent to lease 3 years expires and I have to ask for a new one!
My only real options are to check with a mortgage solicitor to see if there is a reason that I can't be forced to take a new buy-to-let. Or to pay the tracker fee and sell the house when interest rates rise, though I resent having to pay £599 to the Halifax for the privilege of being forced to sell my investment and at a time when it will be a bad time to sell!!!
Any advice would be appreciated!
0
Comments
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Don't understand the situation - why do you need consent to lease on a BTL mortgage? Surely that is the point of a BTL mortgage - it allows you to rent the property out.
CTL is something you get on a residential mortgage which gives you temporary permission to rent the property out.
Perhaps I am missing something.
Are you sure you have a BTL mortgage?0 -
Don't understand the situation - why do you need consent to lease on a BTL mortgage? Surely that is the point of a BTL mortgage - it allows you to rent the property out.
Yeah, my thoughts exactly!!! I'm quite shocked this is happening and they can do this.CTL is something you get on a residential mortgage which gives you temporary permission to rent the property out.
Perhaps I am missing something.
Well this is the case at least when it comes to Halifax as far as I know.Are you sure you have a BTL mortgage?
Yes. I lived in the property and had a residential mortgage with the Halifax since 2005, when had to move out and rent in 2007 they made me purchase the BTL Tracker then. I have my 2007 mortgage contract in front of me now (you made me think so I double checked it!!), it says "Buy to Let", and even has questions like "do you have any Buy to Let mortgages with any other HBOS lender", etc.0 -
Did the 3 year 'consent to lease' thing not ring any alarm bells when you took the mortgage out?0
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Sounds like you never took out a BTL mortgage.
Sounds as though you got 'consent to lease' on your residential mortgage, and they added a premium for the consent to lease onto your residential mortgage.
Therefore, 3 years down the line, you need a BTL mortgage and will incur the relevant fees (which are tax deductible, so dependant on whether you're a higher rate (40%) or lower rate (20%) tax payer a £999 cash fee would cost you £599 or £799 respectively)I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.
That also means I cannot share in any profits from any decisions made!;)0 -
Sounds like you never took out a BTL mortgage.
But OP has posted this:
"I lived in the property and had a residential mortgage with the Halifax since 2005, when had to move out and rent in 2007 they made me purchase the BTL Tracker then. I have my 2007 mortgage contract in front of me now (you made me think so I double checked it!!), it says "Buy to Let", and even has questions like "do you have any Buy to Let mortgages with any other HBOS lender", etc."
If this CTL thing is genuine (sounds very odd) and you signed up to it at the time of taking out the mortgage, I don't see that you have any option but to remortgage.
Or perhaps you could try to convince Halifax to extend your CTL temporarily while you sell the house and get rid of it now?0 -
ET1976 - thanks for pointing out - skimmed over that.
Confused messages going on.
Consent to lease is for a residential mortgage.
BTL is BTL - and should be no need for consent to lease.
I would phone up with the details of the 2007 mortgage and state that no consent to lease is needed, and therefore no change of mortgage product is required as he already has a BTL mortgage.I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.
That also means I cannot share in any profits from any decisions made!;)0 -
Cheers for the advice, I have more clue what to ask the mortgage consultant, trying to phone now.
Oh and I did ask the other day when I had to go see her if I could have time to sell, they said no and I had to take a new deal first.... but no harm in asking again. There is nothing to stop me evicting the tennant and selling apart from the loss of rent and the possibility it wont sell very quickly (hence, I'd have to take a mortgage anyway, a £599 fee in order to be forced to sell your property!).0 -
Great, its her day off. Will get back to you with what happens.0
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