Mortgage Providers Consent to Let

kenshaz

prudryden wrote:

It's not illegal not to tell them. Worst case is they tell you to move your mortgage or pay it off.

Have we any case history whereby they have taken their options for breach.If it is not illegal ,I suspect that some are in breach ,I would believe if that is the case it invalidates your house-hold insurance?

regularsaver1

If you want to have permission to rent your property on a mortgage held with halifax, then the procedures as what was stated above. I used the grant these lets

Must change your mortgage product, there is an arrangement fee of £499, is granted for 3 years, maximum loan to value 85%, letting must be managed. Must have appropriate home insurance as landlord

There is no commision for adding this indicator to the mortgage. It is the only way off doing it

I am confused by one thing though - halifax does not sell indemnity insurance??? They obviously sell home insurance and life cover ect

was it halifax you saw?

There is a reason why Halifax have done this. Halifax does not do Buy to Lets - but how many mortgages was taken with them in the past on a residential basis, but with the intent to let - a good few. So they have bought in these fees and product changes - the rates are similar to doing BTL maybe? Also, more risk, -which is why BTL's are higher.

Alternatively, if you do not tell them or insurers, you are in breach of conditions. They do contact in writing if they see different correspondence address ect They can take action. Have a look in the form, it mentions legal action

prudryden

kenshaz wrote:

Have we any case history whereby they have taken their options for breach.If it is not illegal ,I suspect that some are in breach ,I would believe if that is the case it invalidates your house-hold insurance?

Absolutely correct, definitely a breach of the contract. That makes it a civil case and the mortgage company can exercise their options, if they want to. It may not be worth their effort if the mortgage is being paid regularly. Worse case scenario, you just pay down all the mortgage, if you have the funds. The insurance company, as I understand it, have no interest in whether the mortgage lender knows that it is rented as that doesn't affect their risk factors. They, however, certainly do need to know that it is rented.

regularsaver1

As certain home insurance does not cover accidental damage for tenants ect - but would be in your tenancy agreement

zappahey

We were with the Halifax when we went overseas 4 years ago and they were quite happy to let us let the place for the 3 years the we were away. IIRC it cost us £75 to apply. You need to check if their policy has changed or if he's just trying it on.

As for not telling them, that's our risk. Assuming you take out landlord's insurance, they won't care if you've told you're BS.

never_enough

My OH had a mortgage with the Halifax on his only home. He wanted to rent out the flat as we didn't want to sell straight away. Halifax said they could agree for consent to let for two years in the first instance without changing mortgage. After that I think he had to move to a buy to let mortgage or something. They seemed pretty desperate to keep his business, but it was a couple of years ago.

MarkyMarkD

regularsaver1 wrote:

Alternatively, if you do not tell them or insurers, you are in breach of conditions. They do contact in writing if they see different correspondence address ect They can take action. Have a look in the form, it mentions legal action

As regularsaver1 states, it is not hard for the lender to work out you are letting without consent. If they see a change of correspondence address, they can put two and two together and ask you whether you are letting etc. etc.

I agree with silvercar that it doesn't encourage honesty, but that doesn't make honesty the wrong thing to apply in this case!

regularsaver1

This procedure came in approx September 2005 or maybe earlier

previously yes it was £75 - and did not change mortgage product

but you do have to now

Antj29

Not read thpugh all of this, however what you have been told is a very customer unfriendly procedure.

Basically most lenders will be happy to allow you to let your property out, you do have to apply, usually with a basic rason why and intentions of why you are doing it, they can be refused, but never seen any knocked back if valid reason and using a professional letting agent to look after the property. And as usuall will need to be an assured shorthold tenancy set up, over 6 or 12 months ( later is most common). there may be a an application fee ( £199 roughly). Most lenders will honour your current rate deal, but at the end of it you will need to leave it on the SVR of the lender ( which with Halifax will be high)

I have done this vry thing with First Active for a client only the other week. And they are a new lender on the scene ( well relatively, and still seperate to RBS)

My client is very happy as this cost vry little and gives her the freedom to enjoy herself whilst property covers its costs and increases in value.

As an ex bank employee and an experienced independent mortgage broker i strongly advise clients to steer clear of Branch staff as 95% of the time they know very little about how their own systems can be worked. in favour of the customer.

payless

As an ex bank employee and an experienced independent mortgage broker i strongly advise clients to steer clear of Branch staff as 95% of the time they know very little about how their own systems can be worked. in favour of the customer.

I wish I was so experienced that I knew all the lenders criteria on post completion policies such as "consent to let"- Halifax did change it about a year ago-

At times I have found myself double checking whats been said ( ie in the case of Halifax last year - when they changed their policy), although with a lot of lenders the terms that deal with broker new business are not totally aware of policies effecting existing business. - and with some lenders the teams dealing with existing business often will not speak to brokers individual cases- or aren't willing to make a decision on fees / rate until client provides full information direct.


When faced with this situation I would always suggest people also speak to the lender direct to see whats on offer in form of "consent" , as this can sometimes be cheaper / more flex than conversion to a BTL.