Rent-A-Room & Mortgage

Cisco001

Hi, all,

I am a first time buyer, and think about buying a 3 bed house and rent a room out.

From what I read from internet, most lender don't really have problem on that. But I was with Halifax mortgage advisor this morning, and he said they can't accept??

Anyone know which company accept having lodger and who don't?

Lokolo

What do you mean "they cannot accept"? Do you mean they wouldn't accept that income as part of the assessment? Or what?

Cisco001

Basically, I ask Halifax mortgage advisor if I could rent a room out under their mortgage. He said it needs to be friends, couldn't be a stranger??
But what I am thinking was finding a lodger through website like spareroom, Gumtree, etc if I need to do so.

Then I carry on asking him if I need to get buy-to-let mortgage, then he said he can't offer as I am first time buyer.

I just wonder if anyone have had a lodger, if the lender really say anything. Or is it just Halifax policy? Or is this my mis-understanding?

lvm

As far as I know, you don't need mortgage provider's permission. Could be wrong though.

I'm with Halifax and have been for just over 5 years and I've had a lodger for nearly a year. Haven't actually made them aware of this though so they haven't told me that it's not an issue.

All I was aware it would affect is insurance...

katejo

Cisco001 wrote: »

Basically, I ask Halifax mortgage advisor if I could rent a room out under their mortgage. He said it needs to be friends, couldn't be a stranger??
But what I am thinking was finding a lodger through website like spareroom, Gumtree, etc if I need to do so.

Then I carry on asking him if I need to get buy-to-let mortgage, then he said he can't offer as I am first time buyer.

I just wonder if anyone have had a lodger, if the lender really say anything. Or is it just Halifax policy? Or is this my mis-understanding?

In general you should inform your mortgage lender that you intend to have a lodger but I haven't heard of one refusing permission. That is more common if you are letting the whole property out. Certainly you shouldn't go for a buy to let mortgage. They are intended for owners who let the whole place out. My lender initally said that I would have to complete an application form. I received the form but the wording made it clear that it only applied to letting a whole property. I queried it again with them and they said that i had been give the form in error. It wasn't required for a lodger. I know that Halifax insurance allows owners to let a room out because I have asked. I suggest that you ask them again about this.

Mrs_Z

If you qualify for the mortgage, would you even want to tell them? Lodgers have very few rights and I can't see that having a lodger would be any of bank's business. If you were to let out the whole property, then that's a different matter altogether.

G_M

There is a surprising amount of misunderstanding by 'professionals' (mortgage advisors, lettimg agents, even mortgage lenders) about the difference between lodgers and tenants.

This is usually at lower levels of the organisation (call centre staff etc) who often think they are the same, or don't understand when you explain what you want to do.

I would ignore the advisor. I would not get a BTL mortgage. Once you have the mortgage you van
1) read he small print to see what your terms and conditions are (it probobly says you have to live there as your primary residence, and may say only your family can live there or may not mention provided you live there)
2) decide whether to ask/tell them
3) and/or write with a 'hypethetical question' (yes, write - then you get a proper answer - not some half-informed call centre staff mis-advising you on the phone)... "If I decided to ..... would you allow...."

Insurance is much more significant. You do NOT want to find yourself uninsured when you need to make a claim.