Permission refused to rent - buy to let/remortgage i

sirmosh

Thrugelmir wrote: »

Granted for 1 year. So tenancy should have been timed to co-incide.

It's difficult to do that since even when the tennancy ends it can be difficult to get rid of the occupants even if you've served notice.

Thrugelmir

sirmosh wrote: »

It's difficult to do that since even when the tennancy ends it can be difficult to get rid of the occupants even if you've served notice.

That's not the lenders problem. The OP was offered CTL terms which were accepted so should be adhered to. Not possible to complain now, because its not convenient.

Thrugelmir

JennyM80 wrote: »

Hi
What I was actually hoping for here was some advice on what might be a solution such as if you are aware of any other mortgage products I maybe able to investigate which maybe able to help me in this situation given the breadth of knowledge on this forum.

Best to seek advice before committing to a venture rather than after. All the scenario's need to be thought through. As property as you are finding is an illiquid investment. Timing of exit is not always that simple. There's nothing new particularly in the lenders approach. Other than a tightening down on an abuse of the real purpose of CTL by many.

poppy10_2

JennyM80 wrote: »

1. the tenancy couldn't be timed to coincide - I had a tenant for 8 months, then the property was empty for 2 months, then I have a new tenant who has a 6 month lease .

So you granted a 6 month lease to a tenant when you knew you only had two months consent to let remaining on your mortgage? Can't really blame the bank for that. As a landlord you are running a commercial business, you have to comply with their lending terms.

silvercar

Thrugelmir wrote: »

That's not the lenders problem. The OP was offered CTL terms which were accepted so should be adhered to. Not possible to complain now, because its not convenient.

So if CTL is granted for 1 year and lets assume a tenant is already lined up. So should the landlord grant a tenancy for:

a) 1 year as that when the CTL expires. But the tenant may not leave at the end of the fixed term
b) 10 months, so the tenant has notice to leave with 2 months CTL remaining so the landlord has some leeway
c) 6 months, just in case a tenant is very difficult in moving and the landlord needs to go to court to evict and then back to court to appoint bailiffs and then wait for bailiffs to forcefully evict?

sirmosh

Have you done calcuations on how much the mortgage increase would cost you? As you'll be paying more interest you might find that the decrease in income tax you'll be paying on the income means it won't cost much more?

Thrugelmir

silvercar wrote: »

So if CTL is granted for 1 year and lets assume a tenant is already lined up. So should the landlord grant a tenancy for:

a) 1 year as that when the CTL expires. But the tenant may not leave at the end of the fixed term
b) 10 months, so the tenant has notice to leave with 2 months CTL remaining so the landlord has some leeway
c) 6 months, just in case a tenant is very difficult in moving and the landlord needs to go to court to evict and then back to court to appoint bailiffs and then wait for bailiffs to forcefully evict?

Entirely at LL's own risk. All part of operating a business. No-one says running a business is ever straightforward or easy. That's why many have no wish to.

Perelandra

A tricky situation indeed.

Raising the equity in the property will obviously help on two fronts (lower the monthly mortgage, and improve the LTV figure). Given all the conflicting constraints that you have, it *may* be the case that the only way to achieve this is to borrow the money- even if that's via unsecured loan- to pay off part of the capital (assuming your lender will let you!).

Whilst that normally doesn't make MSE sense at all, the extra interest that you pay on the unsecured loan might be financially advantageous versus the early repayment charges and/or selling costs of the property. Obviously if you do go down this route, save as much as you can, as fast as you can to remove that burden as fast as you can.

Depending on what the 1% interest rate level is, this may well be fair or better than a BTL rate from other lenders anyway?

Good luck, I hope you find a way through this.

franklee

"although the mortgage companies don't see it that way as they see letting as an investment" ...

It is an investment and one that looks to me like it's sailing close to the wind and it's the lender's cash at risk. If you aren't meeting the criteria for buy to let mortgages then you aren't a good risk. As you can't afford to keep the house untenanted, what happens if the tenant loses their job and rent payments falter? What happens for the next void between tenancies, repairs, etc.

What interest rate are you on now? If you're on a low rate an extra 1% may not be easily matched elsewhere. Why is a 1% increase such a problem. With base rate at 0.5% at some point we will see increases of several percent.

It seems to me that if you don't want to sell and you don't meet the criteria for buy to let mortgages and you don't want to pay early redemption penalties then paying the extra 1% to stay with the current deal seems reasonable. But you need savings to back this up for if you get into any of the difficulties that landlords so often face.

silvercar

JennyM80 wrote: »

Hello
Last year I relocated from my home due to work however I didn 't want to sell my home so I rented it out. I had permission from my mortgage company to do so.

This permission was valid for a year and is now expired so I need to reapply.

They have new terms and conditions which mean my interest rate will increase by 1% if I wish to rent the house.

They have also said that because the rental value is not enough to cover the mortgage repayment by 125% I am not eligable to rent out the property anymore. I have however supplied them some more financial information and they are looking into my case.

In the event they say I don't have permission to rent the house so I have only 2 options
1. sell the house and evict the tenant (I really don't want to do this as I have fought quite hard to stay on the property ladder) - I can't afford to keep the house untenanted.
2. remortgage, pay the early repayment fee to my existing lender.

The issue with remortgaging is I only have about 20-25% equity in the house and this isn't enough for the buy to let products I have seen on the market. Which means I have no choice but to sell which I really don't want to do.

I have a tenant, I am managed the finances fine.

I am at a loss what to do can anyone help?

Thanks

Can you be a little clearer. Will they let you rent out if you pay the extra 1% or not?

Also your new tenant on a 6 month lease, how long have they been in the property so far? Whatever the lender may now say, you cannot evict in the fixed term.