NRAM worry

RJM1981

Hi all,

new to the forum and was recommended by a mortgage advisor to post on here for some advice.

We currently have a mortgage with NRAM;

Mortgage balance £70,919
Un secured loan balance £12k

Due to high negative equity and the need for a bigger property we bought another house and rented out our flat.
We have successfully let the property for the last 4 years using the consent to let application each year . Though an extremely infuriating process it has been ok each time until this year.

Things seemed to have taken a serious turn for the worse with years application. We found the NRAM staff extremely aggressive and felt like we had to beg to be accepted this time as if paying the fee wasn't annoying enough.

As part of the process we had to provide a valuation for the property which came back at 75-80k. When we provided this to NRAM they insisted we needed to look to move our mortgage away from them so we went to see a mortgage advisor who said straight away we would never get a new buy to let mortgage without at least 20% equity which we are no where near.

Luckily as my wife is currently on maternity leave NRAM agreed to another year on consented rent but said it would be our last and we wouldn't be accepted again next year

Ideally we would like to keep the property and move to a buy to let mortgage but at the very least we want to rent it out until the sale price covers the outstanding debt.

My question is what are our rights ?
Can NRAM force us to move a mortgage we have no physical way of moving ?
If they can and we can't get the money to pay it off what will happen will they repossess the property ?
Can we get any support in fighting them off ?

thanks in advance for any help

kingstreet

You contracted to purchase and reside in the property. While you do that and make the necessary payments, nothing happens.

If you seek an alteration to the conditions of the agreement, such as consent to let, the lender can impose conditions, or refuse.

You cannot be forced to "move" a mortgage. However, if you let the property without consent, the lender could attempt action to force you to repay the mortgage, as a result of the breach of contract. How this might be viewed by a court, I have no idea.

You would have to seek legal advice in the vent of the above. That would be at your expense.

Should you decide on voluntary repossession, by handing the keys to the lender, the property would then be sold for whatever price the lender can achieve and any shortfall would fall to you for repayment. A secured debt shortfall remains your responsibility for twelve years, you don't get the usual six year statute-barring provided on unsecured lending.

mrginge

Consent to let is never a permanent solution and is given at lenders discretion with whatever terms they want attached to it.

At least you have 12 months to look for a solution. Your options for remortgaging to btl would appear to require -
A injection of finance to reduce the ltv to 80%
A rent level that supports a btl mortgage (usually 125% of the mortgage payment)
Your personal finances to be able to support a btl mortgage

If you don't have all of these, then your solution is to sell the place.

Thrugelmir

ChumpusRex wrote: »

Recent caselaw suggests that lenders cannot "unreasonably" refuse letting consent.

There's no contractual right to. If the borrower decides to buy another property rather than repay the debt owed on the first. Then arguably they've dug their own hole so to speak. NRAM will be within their rights to take whatever action is necessary to recover the debt. So the OP has 12 months to come up with a proposal. 12 months is a more than reasonable amount of time.

amnblog

You are not using the property for it's intended purpose.

I suspect you are making profit on the rental.

You do not appear to be in negative equity.

Consent to let is intended as a short term solution to satisfy the practical needs of the borrower and the Lender - you are not using it as such.

All in all, I suspect you would be wise to have plan B in place by next year.