quick question about potentially renting our mortgaged property

COOLTRIKERCHICK

We have a few ideas regarding the house we live in at the mo.

either to sell, and possibly be in neg equity etc

or rent it out, and pay the diff each month to the Halifax .

IF we decide to rent, and we inform/ask the Halifax, do you know if we need to pay any extra interest? are the Halifax inclined to agree or decline this type of thing etc?

would appreciate any constructive advice

thanks:T

macarena123

You'll need to either go on a BTL mortgage or get Consent to Let. Either way there will be a premium attached
I'll leave it to the pros who post here to give more info about the Halifax specifically but I think it would help if you could let us know

- Current LTV on the mortgage? AFAIK, lenders generally want at least 75%
- Rent yield vs mortgage payments? Will the income be enough to cover the mortgage plus expenses you'll incur as a landlord? Again, I think the rent needs to be about 125% of the mortgage payments

There's a useful sticky on here about being a first time landlord which is worth a read

Werdnal

Its not a sticky actually (we have asked but letting is considered a commercial activity and therefore does not apply ot these forums which are consumer driven), but the link is here:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

Every application for conset to let is taken on a case by case basis, so just because someone else got it, doesn't mean you necessarily will.

There are many costs associated with letting, so unless you have a good income stream to cover lost rent, repair, maintenance, arrears etc and still meet the mortgage payments and your own living expenses, you need to seriously consider whether this is a good financial move for you.

COOLTRIKERCHICK

which ever way you look at it, we will have additional montly payments to pay.

we bought a smallholding last year ( cash sale) which needs loads of work.. we also have a house which is mortgaged, but prob is in neg equity..

with the ever increasing living costs etc, we are now just about covering all costs, but can not save to do the extensive work the smallholding needs.

so we have 2 options... put our mortgaged house into auction, and what ever is owing after the sale, put that onto the smallholding, OR we can spend a few grand and rent it out, which after the rent and agent fees will still leave us paying the diff on the mortgage

I am a bit reluctant to sell it, as we are only 4 houses, and there has been a big supermarket built within a stones throw from the house, and the factory/land that is in front of the houses is now being sold for development.

To any developer, potentially the land that the houses are on are prime retail land... so I am trying to edge my bets that one day a developer might want to buy the houses for development.

edit... we would rough it at the smallholding

BitterAndTwisted

Sell the house and mortgage the smallholding?

To be honest, hanging onto the house and taking on all of the risks that being a landlord entails just in case the land becomes valuable to a developer at some undefined point in time would be one gamble too far for me.

Maybe with all of this proposed development nearby the house's value could drop like a stone. And become unattractive to a tenant as well with all the racket and disturbance. Meanwhile you're financing a dead duck out of your own pockets.

COOLTRIKERCHICK

thanks B&T

that was what we thought, BUT the renting option was niggling in the back ground.

But as you said... the value of the property could drop even further... AND is it worth the gamble..

really appreciate your honest opinion

grifferz

Why do you need to put it to auction? Is there some reason why it won't sell normally if tidied up and priced to sell?

Normally you need lender's agreement to a sale that will end up negative, I expect that is the case for an auction too, so that may not be an option anyway.

franklee

Werdnal wrote: »

Its not a sticky actually (we have asked but letting is considered a commercial activity and therefore does not apply ot these forums which are consumer driven), but the link is here:

http://forums.moneysavingexpert.com/showpost.php?p=41160642&postcount=12

OT can you put a link you your sig? Not tried myself so don't know if it's permitted but if you can you could refer to that.