Help - Letting Request Denied

chief2221

Hi all, some advice please....my daughter bought a house last year. Although married, it is in her name only. They have now separated (he's moved out)and to clear her head a little, she has decided to move back with us (3 miles away)for a short period (no more than 12 months). She does not want to sell and the property is in an area where renting would not pose a problem. She contacted her lenders who originally said no problem over the phone then after completing the documents they sent her, she received a reply stating ..." after consideration we are unable to to authorise the lease..".

My daughter contacted therm and was told that the decision was purely a business one and that she could reapply in 6 months.

I asked what she had put down as her reasons and she said that she mentioned a marital breakup but re-emphasised that it is only her name on the mortgage and that her employment is unaffected.

Is it worth us asking the lender to reconsider - I could guarantee the mortgage during her time with us. Unfortunately she is tied in with them for another 8 months or so.

The alternative is the property would be left unoccupied which is far from ideal. Ridiculous decision by the lender in my humble opinion.

Any thoughts??

silvercar

Just do it, take the risk that they could find out and write to you and tell you that you are in breach of the mortgage terms and conditions. By which time you could either reapply or plan to take your mortgage elsewhere.

Remember to make sure you take out building insurance that allows for the property to be let; you don't want to discover that your home is not covered.

My opinion is based on the fact that your daughter has already genuinely lived in the property. She did not apply for a residential mortgage with no intention of living in it, that would be fraud, obtaining money by deception. This is a breach of a mortgage condition and between your daughter and her lender NOT a criminal activity.

lynzpower

doesnt not having permission from your lender to let negate buildings ins ?

silvercar

lynzpower wrote: »

doesnt not having permission from your lender to let negate buildings ins ?

Not unless you have building insurance through your lender, as some people still do. Then you would need to move your building insurance to a different company; your lender may charge you £25 for this.

keeperbear

As long as you sort the buildings insurance issue, I would go ahead and let out the property. I cannot believe a lender would refuse a rental period. Please name and shame them!

Alan_M_2

It's stated it's decision is based on business, which probably means they don't consider the rental yield to be high enough, could be nothing more than that.

As for the insurance, whoever you take that out with make sure there' no small print requiring lenders authority.

chief2221

Thank you one and all. The lender is "IF" and I don't know whether the decision was based on rental yeild but am certain that question was never asked.

Thank you all.

RAS

Can she get in lodgers and officially stay there? No tax to pay on the first £4,500 if she is still resident and only has lodgers.

franklee

As a tenant I would not be happy renting a property that didn't have the lenders permission and if your daughter is planning to use a letting agent expect them to ask about this.

How much equity does she have? I suspect the amount of equity together with the anticipated rent do not make this a good risk for the lender. Although your daughter has the mortgage in her name only presumably the lender thinks she will incur extra costs by living elsewhere and so may not be able to keep up with the repayments.

Why not go back to the lender and ask for their reasoning. Would paying a lump sum off the mortgage to reduce the debt help any? Can your daughter do that without incurring charges? Maybe that would sort it out. Alternatively will the lender let her switch mortgage type with them and avoid any redemption fees, a long shot but worth asking...