Buy to let mortgages

louiserer

Hiya,

I am in a situation where I need to move out of my house and either sell or rent my house out.

From what I understand I would need to change my mortgage to a buy to let, I think the rates are higher and you need to have at least 25% equity in the property - which I don't.

What happens to all those people in a similar situation, are they forced to sell? What happens if you go ahead and try to let out the property without the correct mortgage?

Many thanks,

Louise

Yorkie1

I'm sure some people do go ahead and let without getting consent from their lender. But, for starters to answer you question.

If the lender finds out the worst case scenario is repossession. And the lender has increasing ways of finding out ...

You will need to change your insurance to LL's insurance. Your lender's interest will need to be noted on it. And when your lender asks for the copy of the insurance policy, they will wonder why it's no longer a residential policy. Or if you don't change it, and the tenant burns the place down, the insurer won't pay out.

The tenant, if clued up, will ask to see proof that you have consent to let. As should the letting agent if you use one. Will you lie?

Your mortgage company will keep sending documents through to your house. The tenant may not forward them, or may return them to sender. Redirections cannot be taken out indefinitely.

If you fail to make the repayments, the tenancy will not be honoured by the lender, leaving your tenant in a much more difficult position.

See this thread for much more detailed discussions!
https://forums.moneysavingexpert.com/discussion/1377883

Wh05apk

Depending on the circumstances, you should be able to get "consent to let" from your lender, thereby staying on the same deal, with no or minimal additional costs.

As Yorkie says, you should ensure you have correct insurance, but lenders do not ask for copies of insurance policies, neither will tenants or agents ask for proof you have consent to let, its none of their business.