Apparently I'm a landlord now. What do I do about my mortgage?!

tyndall_2

Hi! New here and hoping for some advice (and reassurance, as I'm stressing about this a bit).

I bought my flat several years ago and have a flexible rate mortgage.

In part due to redundancy and a desire to save money, I left the UK almost a year ago. At first I thought it would just be for a few months. Then my plan changed and now I'm travelling indefinitely. I'm sure I will be back to live in my flat again, but I don't know when.

Meanwhile my friend moved into it and has been paying an amount of the mortgage - not the full amount because I still have stuff in the flat. We have a pretty informal arrangement which we're both happy with.

However, when I tried to renew my buildings insurance and told the insurers about this, I was told I needed landlord insurance instead. And taking a (belated) look at my mortgage terms & conditions, there's a £75 fee to let the property for a maximum of one year (and all it says is that you can do this if you ask them in advance) plus a 1% increase in mortgage fees; or you can transfer your mortgage to a buy-to-let one, which presumably involves other charges.

I certainly don't identify as a landlord, but I suppose that's irrelevant in their eyes. I'm worried about phoning them to discuss this. Any advice? And is it possible that I'd be better off transferring my mortgage elsewhere?

(Note: I was a first-time buyer; I'm pretty clueless. If that wasn't already evident.)

Thank you for any advice! Oh, FYI, the property is in Scotland, if it makes a difference.

tyndall_2

Update: I've sorted out transferral of my mortgage to 'consent to let' for 12 months. This is okay, but it turns out that if I'm away any longer than that, it would need to be 'buy to let'. Which my mortgage provider would not approve me for, because my income is too low (never mind that I am capable of making the mortgage repayments).

So my new question is: if I were to transfer my mortgage elsewhere, which seems like a good idea, can anyone recommend a provider that would allow me to let?

Thanks.

CLAPTON

are you conforming to the legal requirements of a landlord... gas safety checks etc?

poppy10_2

tyndall wrote: »

So my new question is: if I were to transfer my mortgage elsewhere, which seems like a good idea, can anyone recommend a provider that would allow me to let?

If you were to move your mortgage elsewhere whilst you are still renting the property out, you would need to declare it, and would have to take out a buy to let mortgage rather than a residential mortgage with consent to let

tyndall_2

poppy10 wrote: »

If you were to move your mortgage elsewhere whilst you are still renting the property out, you would need to declare it, and would have to take out a buy to let mortgage rather than a residential mortgage with consent to let

I understand that. But I don't know if there are any mortgage providers that will allow me to do that given my low income. My current provider would only allow 'buy to let' if I earned over 25k, which, even pre-redundancy, I'd never have approached in my wildest dreams. Is this a normal rule or is it unusual?

kingstreet

It is unusual.

Most lenders look at the loan to value, ie the size of the gap between the mortgage and the value of the property.

If that's ok, they then look at the rental income against the monthly mortgage payment, then build in a buffer.

For example, you might be able to get an £80,000 mortgage on a property worth £100,000 as long as the rental income is 120% of the monthly mortgage payment.

Whole of market or independent broker is your best bet!