Change of situation & Mortgage

connors07

Good afternoon all,

Unfortunately I am facing the very real possibility of being made redundant while having bought my place 2 years ago. I have savings saved up so I could afford to pay my mortgage repayments for some time. I have considered taking in a lodger as I have the space and it would help me out too in all honesty.

Do I need to notify my mortgage lender of the change in situation if I took on a lodger?

Another more drastic option is to return to my parents house who have the space for me and I could rent my house out. Again what are the possible problems of doing this? Could they believe I only intended on getting the house to rent it out?

Any advice would be much appreciated!

frazell

This may sound like a bit of a stupid question but, why do you not think that you'll be able to get another job?

My personal experience of redundancy is that in some way I've come out a little better for it. Either socially, financially or just happier in a new position.

If you've got a decent financial safety net then I'd look at this as an opportunity to do something new/different, but priority No. 1 should be to look for another job!

If this is not fruitful after a few months then I'd be considering plan B, C or D.

To answer your question about telling your mortgage provider, I doubt they will be that bothered if you keep up your payments.

MortgageMamma

You have to ask your mortgage lender for consent to let the property and most of the time it is granted. Sometimes they will increase the rate a little other lenders do not. If you are going to let out the property look at tax implications as its not as profitable for landlords in coming years due to changes to how tax is calculated on the profits/deductions for home improvements.


A lodger is a good option if you can bear sharing with someone else, on this site you should be able to find information on how much per year you can rent a room for without paying tax on it, and also a decent lodger rental agreement. You can also buy these agreements from Tesco fairly cheap I saw some the other week. I remember because I thought it was a random thing for Tesco to sell!


You don't say how much equity you have in your property - remember you'd have to sell or pay to store your stuff if you moved back in with parents...and having done it 8 years ago and only lasted 5 months I can tell you it ain't easy when you are used to having your own place!

connors07

Many thanks for the replies.

I do intend to get another job, just I moved with work and there isn't a lot of opportunity round here to do what I currently do, ideally I will remain in the area so I am looking and applying.

Just wanted to get an idea of where I stand should I struggle to find something locally and what my options are.

Very good point in regards to storing my stuff... I did not think of that at all! Hopefully I won't need it to come to that, I will check the Tesco lodger rental agreement out as well.

Thanks again.

pathtofreedom

You need to factor in additional costs for a lodger as well, eg lose your 25% single person discount on council tax (if you have that) changes to buildings / contents insurance to include one that covers lodgers, increase in gas / electric bills etc.

You shouldn't need a full consent to let as such from the mortgage provider as long as you're still going to live in the property, but you need to read the paper work to see if it said you need to check with them if you want a lodger or not.

Also depending on the area / demand could airbnb or only renting it out monday - friday be easier, you'd still need the extra insurance etc but it is easier to stop doing it then when you do get a new job. It might be harder to ask someone to leave if you have them living there a few months then want your space back.