Letting out property without CTL -lenders catching up

BitterAndTwisted

I suspect lorry-loads of ordure is going to hit the air-conditioning at some point when lenders become aware of the real level of their current exposure with CTL's and force their borrowers onto a BLT mortgage. Repo's ahoy!

MissMoneypenny

BitterAndTwisted wrote: »

I suspect lorry-loads of ordure is going to hit the air-conditioning at some point when lenders become aware of the real level of their current exposure with CTL's and force their borrowers onto a BLT mortgage. Repo's ahoy!

The same "lorry-loads" for many landlords when the Welfare Reform Bill comes in in 2013 and they see their own welfare payments cease. Those that don't think their Child Tax Credits are welfare payments, are in for a shock. And I hope they have plenty of savings put by for if they lose their jobs for over 6 months, get ill or are relying on their tax credits to help pay their rent while they let their own mortgaged house out. Universal Credits comes with strict new rules on assets and conditionality for claimants.

SouthCoast

those whose phone calls to the Halifax flag up concerns and those who have alternative addresses registered with the LLoyds banking Group, who own Halifax.

I understand that the Lloyds/Halifax computer systems were recently merged and guess that this is starting to throw up some anomalies.

Isleman

FireWyrm wrote: »

OK, this is probably a stupid question, but WHY do you need consent to let? Why does letting a property change the risk to the lender? They still get their money, regardless?

So they can get bigger profits !!!
Sure all lenders give you all the stories about the "increased risk". I am very curious to know how they calculate this so called lending risk.
You will find that most lenders will put their rates up without looking at your specific case is more like one calculation fits all.

kingstreet

I would imagine there is a clause in landlord's insurance invalidating the cover without consent to let.

In addition, a landlord continuing with owner-occupier insurance is risking a claim being declined for breach of terms and perhaps being left with a smoking heap of embers and a rather unhappy mortgage lender.

tartanterra

BitterAndTwisted wrote: »

I suspect lorry-loads of ordure is going to hit the air-conditioning at some point when lenders become aware of the real level of their current exposure with CTL's and force their borrowers onto a BLT mortgage. Repo's ahoy!

You can now get a mortgage based on Bacon, Lettuce and Tomato?

Is this loose, or sandwich based?

Whatever will they think of next!............

mustrum_ridcully

tartanterra wrote: »

You can now get a mortgage based on Bacon, Lettuce and Tomato?

Is this loose, or sandwich based?

Whatever will they think of next!............

Haven't you heard? Food prices are booming! Food owners are now 4% better off than they were this time last year! Forget your savings accounts or pensions, invest in food now - you don't want to miss the (gravy)boat!

But never fear, with BLT mortgages this isn't a problem, 90%, 100%, 100+%, repayment, interest only... many great BLT mortgage deals are available.

tartanterra

MissMoneypenny wrote: »

The same "lorry-loads" for many landlords when the Welfare Reform Bill comes in in 2013 and they see their own welfare payments cease. Those that don't think their Child Tax Credits are welfare payments, are in for a shock. And I hope they have plenty of savings put by for if they lose their jobs for over 6 months, get ill or are relying on their tax credits to help pay their rent while they let their own mortgaged house out. Universal Credits comes with strict new rules on assets and conditionality for claimants.

Universal Credit Policy Briefing Note 6.
Transitional Protection

"There will be no cash losers directly as a result of the migration to
Universal Credit where circumstances remain the same."

"The Government will provide cash protection to claimants whose Universal Credit award would be less than under the old system, in the form of an extra amount to make up the difference between the old and the new. The maximum amount will be fixed at the point of change, and will continue to be paid until the value of the award under the new system overtakes the levels of the pre-Universal Credit entitlement"

kingstreet

Another thing which occurred to me.

I wouldn't be surprised if the recent announcement of the electronic link between HMRC and mortgage lenders isn't used in the future to help HMRC identify landlords from lender records to chase up income tax evasion.

MissMoneypenny

tartanterra wrote: »

Universal Credit Policy Briefing Note 6.
Transitional Protection

"There will be no cash losers directly as a result of the migration to
Universal Credit where circumstances remain the same."

"The Government will provide cash protection to claimants whose Universal Credit award would be less than under the old system, in the form of an extra amount to make up the difference between the old and the new. The maximum amount will be fixed at the point of change, and will continue to be paid until the value of the award under the new system overtakes the levels of the pre-Universal Credit entitlement"

But they won't have a Universal Credit award if they have more than 16k in savings and assets (excluding the value of the house they live in).

From the way I read your quote, those that claim x thousand per year for all their children and will see their welfare payements reduce under the welfare reform bill, will have some protection. i.e. The government have protected the rate of money for those that claimed the old Incapacity Benefit and have now been switched to the new ESA welfare payment; but they will not get any increase in their welfare until the lower ESA payments, catch up. However, many of the old IB claimants don't now qualify for the replacement ESA, so they don't get any payments at all. In additon to this, ESA claimants have conditions put on them, whereas the old Incapacity Benefit claimants, didn't have any/many conditions to keep getting their payments paid into their bank accounts.

Don't forget that the where circumstances remain the same could trigger a change by the birth of another baby; a child leaving school; child leaving the house/going to university; couples splitting up; loss of a job etc. There is recent thread on the benefits board where a woman has just lost the protection of her '9 months before her LHA rate (housing) drops', because her child left home. Her circumstances changed: so she now gets the new lower rate for LHA as well as losing the extra room allowance for that child.

Interesting how we all have a different take on the new Universal Credit rules, so it will be good to see the new rules on the government site, when the bill is passed. However, they have made it quite clear that they intend to get the welfare state back to what it was intended for and to stop those who just live off the welfare state when they could work longer hours to support their family. UC claimants will also have conditions put on them: no more just filling in forms once a year and getting the money put in the bank account.

Edited to say: As it is the housing board, the propsed changes to SMI (Support for Mortgage Interest) looks intesting too. It seems the governmnet are considering putting a charge on the house for those that claim SMI, so the the taxpayer can get their money back when the house is sold. I was amazed to read on the benefits board, how many years some people have been claiming SMI:eek: