Renting out do i need to change mortgage?

qwertyqwerty

Hi I have just purchased my first property, and in order to get a lower interest rate, and borrow a higher amount, I went with the first time buyer mortgage, I am now planning to rent the property out rather than live in it. I am worried if i inform my mortgage company of this, they will make me switch mortgages, to a higher interest rate and make me pay the redemption fee, does anyone know if this will be the case? Also what would the legalities be, if i didn't inform them, and just put tenants in? Another problem is i have taken out house insurrance with the mortgage company, if i was to switch to landlords insurance, i would have to inform them of my intentions, any advice on what will happen if i do or don't them of my intentions will be much appreciated.

Thanks,

MortgageMamma

did you always intend to let the property or was it originally intended as your residence? How long have you had the mortgage?

herbiesjp

YOu need to obtain consent to let from the lender

If you do not inform them you will be in breach of the lender's T&C

Don't forget you will need to chnage your buildings insurance as well, otherwise you will find you will not be covered

HTH

qwertyqwerty

I was intending to live in it, but changed my mind before completion, and decided i would let it out, to save money for refurb. I have had the mortgage for a week. I am worried if i inform them, they will switch my interst top a higher rate, and make me pay a redemption fee, for changing the conditions, is this likely to happen?

MortgageMamma

The lender will think you intended to let it out from the beginning and may well up your interest rate or refuse you consent to let outright

Are you tied in to your current mortgage deal? who is your lender?

qwertyqwerty

Can they refuse me the right to let it out? I am currently tied in for 2 years, my lender is the Halifax, I was really hoping to be able to let this out short term, what would my options be?

airforce_beret

im got a 2 yr fixed with the Halifax and informed them that due to me being in the RAF, I may have to rent it out in the future if I'm posted elsewhere. they said this should be fine, I bought with the intention of living in the house though, you have yet to live in the house. I do know of some people in the forces that have been able to pay an extra fee to rent the house out but keep the same mortgage.

MortgageMamma

Personally if I was someone at the Halifax assessing your situation I would say no on principle as it looks like you have bought this house on residential mortgage deliberately to avoid the 15% buy to let deposit you would have had to pay.

I'm not stipulating that this is or is not the case, just that it looks bad and that would be enough to put me off granting you consent to let

airforce_beret

im with mamma on this. maybe you should live in the house for a while then try and rent it...doesn't look as bad then

qwertyqwerty

Just spoke to the halifax, they say they don't do but to let mortgagees them selves, so if i was to change over i would have to pay the full 3% redemption fee, as i would be switching mortgages. So i have now decided to stick with my original mortgage, and cancel the insurance i have with the halifax, and get the landlords insuracne elsewhere. I'm a bit worried about doing this, is there anyone else who has taken this route, i.e not declare that someone else will be living in the property?

AmyC_3

... about not informing the mortgage co.
I lived in my flat for a year then moved out but got consent to let. They wrote to me regularly to see if I still had tenants and I had to pay £100 every time I changed tenants!
Your insurances would probably not be valid if something happened and they found out in was rented out and not lived in by the owner.
How long is your redemption period? You could live in it for a year then get a consent to let for a year or so if this took you out of your redemption period.

Amy