Mortgage Company & Consent to Let Refusal

Permafrost

Hi all,

I'm in a tricky situation.

I got made redundant a while back and have been doing odd jobs and attending part time uni to finish a course off, i was struggling to make payments on my repayment mortgage, ONE month i paid late and it went to arrears (paid within 15 days of letter). I am now completely up to date and starting a new regualar job today.

I need to move to manchester with my partner who has a flat there anyway. The new job is there.

I want to rent out my flat, i applied for permission and i was gutted to hear it has been turned down due to 'my account going into arrears'. I asked if it could be reassessed and it looked at, but the answer was no and with very little helpful advice, well none, when i asked. So... I seem to only have 3 options left:

re-mortgage on a buy to let and pay a 1200 penalty (last year of a 5yr fixed rate) with another company.

just rent a room out.

Is there anything else i can try? I really dont want to go down to road of doing things i shouldnt, like renting out the whole flat without permission.

Thanks,

Thrugelmir

Sell the property.

If your work is now in Manchester will you ever return?

kingstreet

If your credit file shows the late payment on your mortgage, I can't see you being able to remortgage elsewhere. In addition to that, there's the issue of your income/employment too.

You haven't mentioned the one thing I'd suggest you consider and that's to sell.

Permafrost

The main reason I am not considering selling is because i purchased the property for 125,000 in 2007.

Its now worth about 100,000 and rising slowly. I also have connections in birmingham for future work, manchester is temporary till summer 2012.

I currently pay 350 for the mortgage. Rental income would be 750.

kingstreet

So the property is worth £100k, what's the outstanding mortgage? Is there any equity?

Tjrw1985

Tricky one here.

If your exisiting provider has declined to allow you to let the property out it may be because they have never allowed buy to let mortgages.

It is a tricky one but people have rented properties out and as long as you make sure the mortgage is paid on time every month they will never find out. However, if they did find out, if they ever sent external agents out to the property (there would have to be arrears for this to happen) then you are in breach of the mortgage terms and conditions, so be careful this way.

You could always write to the lenders complaints department asking for an explanation.

kingstreet

Tjrw1985 wrote: »

Tricky one here.

If your exisiting provider has declined to allow you to let the property out it may be because they have never allowed buy to let mortgages.

It is a tricky one but people have rented properties out and as long as you make sure the mortgage is paid on time every month they will never find out. However, if they did find out, if they ever sent external agents out to the property (there would have to be arrears for this to happen) then you are in breach of the mortgage terms and conditions, so be careful this way.

You could always write to the lenders complaints department asking for an explanation.

The OP was given an explanation at the time;-

it has been turned down due to 'my account going into arrears'. I asked if it could be reassessed and it looked at, but the answer was no

Tjrw1985

Gathered that, Thanks.

You would be amazed at what decisions complaint departments can overturn.

madeupname1

I would push the mortgage company to find out what action they intend to take against you if you decide to let the property out and advise them anyway. They may only seek to impose a penalty interest rate (e.g. adding 1%) but beyond that accept the letting and take no further action providing the mortgage is being paid on time. Of course, the penalty may mean that the economics no longer work for you.

Thrugelmir

madeupname1 wrote: »

I would push the mortgage company to find out what action they intend to take against you if you decide to let the property out and advise them anyway.

Inclusion on the National Hunters Database. Which is a sure fire way of trashing your credit record for a very very long time with all the UK's major lenders.

Without trust there's no business relationship. Once lost hard to regain.

madeupname1

My lender didn't want to grant me consent to let initially, but I pushed them and they relented. It certainly hasn't affected my ability to obtain credit. I did not have any adverse credit history however.