Renting out house mortgage advice needed please!

lucybrown162

I currently own a property that, if sold, with exit fees etc would make a slight loss on the outstanding mortgage. I'm stuck in a fixed rate period for a considerable amount of time.

I recently split up with my partner and want to move out of the house but can't afford to pay for the potential loss.

If I rent the property out, I wouldn't make enough to cover the mortgage, but it would enable me to live somewhere else.

I know I'd have to inform the mortgage company if I did decide to rent the property and that's likely to result in an interest rate increase. I don't think I can switch to a new mortgage deal as due to the property price drop the value of the house is only slightly more than the mortgage outstanding.

If I were to let out the house, would I then be able to get a new residential mortgage or would the existing mortgage stop me from doing that?

namzij

Yes you would still be able to get a residential mortgage even if you still have an existing morgtage. As long as you got consent to let. Why dont you let out the property and cover the shorfall of the rent, would that be manageable for you?

Hardav

It may not result in a rate increase, just get your lenders permission to let and they should let your keep your original deal subject to them changing at any time. You can ten get a new mortgage for a property to live in and your new lender should treat your existing property at what is called "Let to Buy". If the rent received does not cover the mortgage payment at interest only then they may take the difference as a commitment.

beecher2

If you have enough money available for a deposit on a new property then you'd be better off using it to clear some of the negative equity and look to selling as an option. Rent, build up your deposit again and start over.