lenders permission to let?

zarathedog

Hoping for a bit of advice on lenders permission to let.

Me and my partner bought a residential house four and a half years ago. We split up about 10 months ago she took all the appliances to a new home and as there wasnt anything in the house i moved to my mums.

I phoned my lender to see if i could let the house out, they said no (cant remember the reason why). Not a problem i put the house for sale. Had no interest really in the intervening 10 months.

I have a good job and paying the mortgage as not been a problem, until now its looking like the firm i work for is going bust so im gonna be out of a job. As its not selling im now really wanting to rent it out.

Is there any way i can get the lender to change there mind? can i plead my case? I have read the sticky thread around lenders permission to let. I dont want to just rent it out and risk it.

My fixed mortgage term runs out in april 2011 so i will be able to change to a BTL mortgage, but i really am gonna stuggle paying the mortgage until then though with no job.

As anyone been in a similar predicament? all advice is very welcome.

Thanks for reading

Chinkle

What kind of hit would you take by redeeming your mortgage early and switching to BTL? Have you researched what rental income you could expect and your obligations as a landlord and how would you finance any voids in rental? You need to work out if this is a worthwhile option for you.

Why isn't the house selling? You need to work out whether it would just be easier/financially advisable to take a hit on the price of the house to be rid of it and move on.

Btw, assume your ex has no financial interest in the house from what you have posted.

zarathedog

Theres an early repyment fee of £3000 if i change the mortgage type before the end of the fixed term. The rental income for the area is roughly the same as my mortgage payment s give or take £20 either side.

I have researched been a landlord and the obligations, i actually wanted to rent it out in the first place but was refused by the lender.
The house isnt selling due to what i need to get for it and i dont really want to take a hit by selling it for negative equity.

No my partner as no financial input, she brings up our son full time so dont expect her too. Another point regarding my partner does it cost to get her name took off the mortgage?

nollag2006

There may be stamp duty to pay if you are not married to your partner, and wish to remove her from the deeds:
http://www.guardian.co.uk/money/2009/sep/30/stamp-duty-land-tax

Don't forget also to register with HMRC's NRL scheme to esnure you get your rental payments from the tenant gross of income tax:
http://www.hmrc.gov.uk/cnr/nr_landlords.htm

Also, don't forget to get decent landlord's buildings insurance, as your existing home insurance will likely not cover renting it out.

As for the CTL issue, it really makes my blood boil. It is a pure scam by the banks to force people like you, who bought the property with no original intent of selling, onto a ridiculous Buy to Let rate. I am not condoning it, but the chances of you being discovered without CTL are minimal once you pay for a mail redirection service from the post office.

zarathedog

My partner doesnt want any money to be bought out she s happy to let me have it in just my name so it would just be a case of taking her name off. Is there an administration fee for this?

I know what your saying about the banks. I really dont want to take risks without getting consent, im more than willing to pay a little extra on the interest for the permission to rent as its only till april next year. Its like hitting brickwalls everywhere you turn. You cant sell cause of the market and they wont let you rent it out.

silvercar

If your partner's name is on the deeds they will need to consent to letting it out and account to the revenue for their share of the rental income. Really you need to get their name off the deeds, lenders call this "transfer of equity" and are usually agreeable provided your income justifies the mortgage level.

pararct

How much equity do you have in the property?

The reason for lack of interest was probably the price you were marketing it at.

If you can find a medium you are much more likely to shift it. Of course this will be dependant on being able to clear your mortgage from the sale proceeds.

BTL is not for novices you need to read up a lot on it. For example voids and non paying tenants.

If your job is under threat (and in this economic climate) then TBH you are probably better off selling it.

bitsandpieces

If the lender wouldn't give you a buy-to-let mortgage before, there's no obligation for them to do so in April 2011. They're going to be less likely to do so if you don't have a job. Not nice, but their priority will be to protect their money.

Have you thought about other ways of marketing and presenting the property? Or dropping the price?

snowlady07

Who is your lender?

Have you asked again, more recently, if you can let your property out? Worth asking if not.

zarathedog

The lender is coventry BS. No not re asked them i could give it a try but nothings changed since last time so i wont hold to much hope.

neverdespairgirl

A BTL mortgage would normally require about 75% loan-to-value (min 25% equity) and that the rent is 125% of the mortgage payments.