Buy to Let my property refused by mortgage lender - so what is my next move????

herbiesjp

MuDvAyNeX wrote: »

Just a quick question you said your repments are £569, is that on an Interest Only or a Repayment ?

Only asking as some lenders will work on how much you would owe in Intrest and not include the Repayments in there calulations e.g Mortgage Express do it this way.

If your paying 500 per month but only 350 of that is the interest that is what there calcuations go on .

If you get what i mean...

That's exactly right

The OP would also need to find out the penalty for leaving and then either pay this penalty up front or add to the mortgage amount.

[Deleted User]

Just rent it out anyway, I know one guy thats got 4 BTLs on normal mortgages without declaration.

A_Nice_Englishman

Yant1 wrote: »

Just rent it out anyway, I know one guy thats got 4 BTLs on normal mortgages without declaration.

I wouldn't rent a house from such a landlord. If he's willing to defraud his mortgage lenders how will he treat his tenants? What would happen if he failed to pay his mortgage?

http://forums.moneysavingexpert.com/showthread.html?t=589041

UK007BullDog

A_Nice_Englishman wrote: »

I wouldn't rent a house from such a landlord. If he's willing to defraud his mortgage lenders how will he treat his tenants? What would happen if he failed to pay his mortgage?

http://forums.moneysavingexpert.com/showthread.html?t=589041

But how would you know? The landlord is not going to say: "Dear potential tenant, the mortgage of this property is with XYZ and its not a BTL mortgage."

Lets be real and realistic. As long as the "owner" can pay the mortgage himself as if he were living in it himself and has no other mortgage to pay why should he/she not rent it out? That just makes no sense at all.

As with a real BTL mortgage the landlord could still fall foul and not meet the payments and the property could still be repossessed. Leaving the tenant in a precarious situation.

Debt_Free_Chick

UK007BullDog wrote: »

But how would you know? The landlord is not going to say: "Dear potential tenant, the mortgage of this property is with XYZ and its not a BTL mortgage."[/url]

You check the Land Registry for the property you're renting, see there's a mortgage against it and then ask the LL to provide a copy of the lender's confirmation that they have permission to let the property.

He need only show the mortgage document. If it contains a clause stating that the borrower (LL) cannot let, sublet or assign the property, then he doesn't have the lender's permission.

Lets be real and realistic. As long as the "owner" can pay the mortgage himself as if he were living in it himself and has no other mortgage to pay why should he/she not rent it out? That just makes no sense at all.

Because you can be effectively homeless with only 14 days notice!

As for

As long as the "owner" can pay the mortgage himself as if he were living in it himself and has no other mortgage to pay why should he/she not rent it out?

... because he would be in breach of the terms of his mortgage.

As with a real BTL mortgage the landlord could still fall foul and not meet the payments and the property could still be repossessed. Leaving the tenant in a precarious situation.

Nope - because the lender is effectively a party to the AST - not strictly, but they are agreeing to honour the terms of the AST. This way, then they have to give the tenant notice to quit which is at least one month and could be more.

A_Nice_Englishman

UK007BullDog wrote: »

But how would you know? The landlord is not going to say: "Dear potential tenant, the mortgage of this property is with XYZ and its not a BTL mortgage."

Lets be real and realistic. As long as the "owner" can pay the mortgage himself as if he were living in it himself and has no other mortgage to pay why should he/she not rent it out? That just makes no sense at all.

As with a real BTL mortgage the landlord could still fall foul and not meet the payments and the property could still be repossessed. Leaving the tenant in a precarious situation.

I agree, a tenant doesn't know and that is a gaping hole in the system. I'd like tenants to be able to check that landlords have permission to let and are not in arrears with their mortgage payments.

In the thread I linked to the tenant is facing eviction within a couple of weeks. As I understand it, if the landlord had had permission to let the tenant would have had securty of tenure until the end of her lease.

UK007BullDog

I can see your point however if you are given 14 days or 1 month, does not cut it, especially here in London, the time is just too short. The rates of repossessions with tennants in the property have rocketed. I get multiple auction catalogues and there are a lot of BTL's out there which are repossessed or in the process of being repossessed.

Personally I believe that a lot of lenders, especially those who do not have a big money deposit in the back are currently reacting very unfairly towards their customers. So consumers need to take some action and just go for it. So far as long as lenders will not take action against plain outright fraud I cannot see them going after landlords who rent out their homes and still pay the mortgage on time. In the end the lender wants the money (interest) paid.

I feel quiet strongly about this as for the last 6 to 8 weeks I get nothing but horror stories where the lenders are running roughshot over their customers. Literally forcing the customer to pay out the penalties to be able to leave instead of showing some flexibility to assist the customer. Paid penalty in the thousands and tens of thousands equals massive profits for the lenders. I find this behaviour fuels the problems in the market place.

UK007BullDog

From what I see presented to me every day I think there are a lot more residential mortgages which should be BTL's out there than what the statistics actually are aware of. The landlords pretend to be still living at the property and they turned it into multiple occupancy. I had 4 BTL's turned down as the surveyor confirmed that they are multiple occupancy. The customer of one of them is desperate to get a BTL mortgage but due to the credit crunch no one will remortgage it on that. His plan is to chuck out the tenants or change the locks on the doors and pretend they are all one big happy family. He has been paying the mortgage for many years all he wants is a new fixed deal to get off the SVR.

inmypocketnottheirs

I would have a look at Bradford & Bingley. They have a plethora of BTL deals, at upto 85% LTV. At 91k to a value of 125k you are 73% LTV so that would stack up.

Where are you in Cheshire? I have BTL's in Holmes Chapel, and property lets very quickly here.

Good luck. If you need any more help PM me.

MuDvAyNeX

The only problem with letting the property out without any consent from the lender is that if they find out they can ask you to repay the mortgage including the ERC if applicable.

Your going to say *how will they ever find out ?*, well would you be happy to keep on sending all your mail to a house your tennant is living in ? i would not be happy that some sensetive information could fall into the wrong hands.

The lenders do find out in alot of cases and can even charge you for letting out the property without there consent, its a risk if you do let the property out and don't get any kind of consent at all.