Is there anyone I can complain to about being unfairly treat by my mortgage company?

costelloe16

Hi,

The situation that I'm in is that I'm going abroad to work and want to rent out my house for the 18 months I'm away, but my mortgage company just won't budge.

1) They wont allow us consent to let
2) We don't own enough of the house to convert from buy-to-let mortgage
3) We don't want to sell our house because a) it might not sell by the time we get back and b) we're coming back so will need out house again in 18 months.

We considered asking family to help us raise enough money to put into the mortgage so we could afford the buy to let option, but the mortgage company say they would raise our rate to 5.99% from 2.49%, and then we'd be in breach of their OTHER rule which is that rental income needs to be 125% of the mortgage payments. The raise in payments would be this impossible.

So we decided to just go anyway and hope we could afford to pay our mortgage whilst renting abroad, except the mortgage company said no because our agreement says the house can't be empty for more then 30 days.

I'm tearing my hair out. The only option that I can see is that we stop paying our mortgage and declare ourselves bankrupt!

Is there anyone I can complain to, go to, meet with in order to prevent this? It seems that Birmingham Midshires are just being insanely unfair and unrealistic. I don't see why they'd rather make it harder for me to pay my mortgage than guarantee they get paid each month!

Yorkie1

You won't want to hear this, but you are not being treated at all unfairly. You took out a residential mortgage and now you want to vary those terms by renting it out. That is a higher commercial risk for the lender and they are entitled to refuse to take it on.

bris

Nothing to complain about, the mortgage company are within their rights to refuse as they are taking a greater risk. It's standard practice with most lenders now to refuse the consent to let as they don't want people taking out cheaper residential mortgages and then finding out people are wanting to rent them out. BTL mortgages require a bigger deposit, higher interest rates and strict rules on the rental income to mortgage payments, so they may think you are trying to get round the system.
You would be better selling up rather than going bankrupt. If you go bankrupt you will have a big problem getting anything when you get back in 18months.

costelloe16

But that's the problem, I don't want to sell because I'm only going short term. I might not manage to sell in that time either. And that means I come back to no home, on no ladder. I'm not renting out as a way to make a profit or get cash etc it's to help pay 18 months of mortgage with less risk.

When we took out the mortgage we knew we might be travelling and they said we could get consent to le if we didt, it's only recently they've changed their policy so I don't think it's fair that it applies to us. It's not what we signed up for!

They do allow consent to let, but just really specific rules, for example they said if we were working for an English company instead of Australian company that would have been ok? So it's us personally they're saying no to, not the concept in general.

Jinx

Get a friend to move in - rent free but paying all the bills and go off on your travels...

80schild

Could you remortgage with a different company on a BTL mortgage?

JQ.

Jinx wrote: »

Get a friend to move in - rent free but paying all the bills and go off on your travels...

If they look like a tenant and sound like a tenant they are a tenant. Paying the bills would not turn them into a lodger, neither would leaving a landlords bedroom or landlords stuff in the house. OP would still need BTL or consent to let and landlord's insurance, etc, etc.

costelloe16

We bought our house 4 years ago, and it's still not fully regained the price we paid, so it's difficult for us to sell or remortgage with current mortgage offers, due to the whole financial crisis, which is part of the reason we want to leave and work somewhere where we can rebuild our savings slightly.

We thought about letting my nephew live there for free, and like you say pay the bills etc but apparently that won't be allowed either.

Jinx

JQ. wrote: »

If they look like a tenant and sound like a tenant they are a tenant. Paying the bills would not turn them into a lodger, neither would leaving a landlords bedroom or landlords stuff in the house. OP would still need BTL or consent to let and landlord's insurance, etc, etc.

It was just a thought. Normally when I go away my mum stays at my house.... if I went away for 18 mths travelling (I WISH!!!) and she stayed at my house to look after it would that make her a tenant?

80schild

costelloe16 wrote: »

We bought our house 4 years ago, and it's still not fully regained the price we paid, so it's difficult for us to sell or remortgage with current mortgage offers, due to the whole financial crisis, which is part of the reason we want to leave and work somewhere where we can rebuild our savings slightly.

We thought about letting my nephew live there for free, and like you say pay the bills etc but apparently that won't be allowed either.

Would leaving it empty and unfurnished and getting someone to check in on it from time to time not be an option then or do you need the rent money to pay the mortgage?

G_M

costelloe16 wrote: »

Hi,

1) They wont allow us consent to let you've asked them to alter the terms of the mortgage - they've declined
2) We don't own enough of the house to convert from buy-to-let mortgage (I assume you mean TO buy-to-let?) Well, BTL is higher risk so lenders want more security
3) We don't want to sell our house because a) it might not sell by the time we get back and b) we're coming back so will need out house again in 18 months. understandable

We considered asking family to help us raise enough money to put into the mortgage so we could afford the buy to let option, but the mortgage company say they would raise our rate to 5.99%see above re risk from 2.49%, and then we'd be in breach of their OTHER rule which is that rental income needs to be 125% of the mortgage payments. this is common sense. tenants typically pay 10 months rent a year, (gaps between tenants; tenants in arrears etc) plus there are overheads to pay The raise in payments would be this impossible.

So we decided to just go anyway and hope we could afford to pay our mortgage whilst renting abroad, except the mortgage company said no because our agreement says the house can't be empty for more then 30 days. THIS I don't understand. Are you sure they are not referring to your insurance policy (which might be via the lender?)? Most insurance is invalid if the property is empty more than 30 (45, 60?) days. But:
a) you can get a relative to sleep there one day a month or
b) you can get a specialist policy to cover unoccupied property

I doubt if the mortgage agreement itself prohibits leaving the property unoccupied.

I hesitate to suggest this, but a last resport is to rent it without permission. They'd only know (or to be honest, care) if your mortgage went into arrears. A bit unfair on your tenants, but again, if you keep paying the mortgage it won't affect them.

Make sure you fully understand being a landlord though.