Mortgage provider did not allow to take lodger

magdziurek

I was wondering if any of you had similar problem...

We wanted to rent out one room in our property. Mortgage with Tesco Bank and we would still live in in that property, so talking about one lodger.

Rang up Tesco Bank saying, that we are considering renting a room to one person. I haven't said that I am going to do that just theoretical question. I highlighted that I was thinking about only one room, not entire property.

Lady said NO and did not give me any further explanation. She asked why we would want to do that. I said, that just for extra income as we have 3rd room empty.

Anyone has similar 'problem' ??

I doubt that bank would be so involved if we pay on time our mortgage. I know, that lots of people rent a room in the property, where the live in... I just think nobody actually inform mortgage provider.

sevenhills

magdziurek wrote: »

Lady said NO and did not give me any further explanation. She asked why we would want to do that. I said, that just for extra income as we have 3rd room empty.

Anyone has similar 'problem' ??

I informed my lender, The Coventry, and they said that it did not matter, I didn't need permission, but they noted it on my account.
You can have a lodger in social housing, perhaps the person that you spoke to got it wrong?
Maybe she was thinking about the lending Criteria, rather than asking permission once its your house.

jonnyd281

OP, are you always late paying your mortgage or in arrears? If you are could it be something to do with that?

davidmcn

sevenhills wrote: »

I informed my lender, The Coventry, and they said that it did not matter, I didn't need permission, but they noted it on my account.
You can have a lodger in social housing, perhaps the person that you spoke to got it wrong?
Maybe she was thinking about the lending Criteria, rather than asking permission once its your house.

Or maybe she had considered Tesco Bank's mortgage conditions, which do require their consent:

You must not grant any person rights or allow any person to get rights over the property, create another mortgage over the property or let or give up possession of the property or any part of it without our written agreement beforehand. This will include granting or agreeing to grant a lease or tenancy of all or any part of the property unless you have our written agreement beforehand.

Other lenders might not require consent for lodgers (they invariably will for a letting of the whole property).

magdziurek

Always on time with paying my mortgage, which I took last year... Even decent deposit as 25%.

kingstreet

There is no hard and fast policy on lodgers (or consent to let) across the market.

Some lenders allow none, one, the other or both.

Typically, if you pick a lender with the keenest rates in the market, expect them to have the tightest terms and conditions as they are demanding the most competetive rate-swaps to get the rates you want!

A residential first charge mortgage is designed for those whom will exclusively reside in the mortgaged property and the rates reflect that...

sevenhills

davidmcn wrote: »

Or maybe she had considered Tesco Bank's mortgage conditions, which do require their consent:

You must not grant any person rights or allow any person to get rights over the property, create another mortgage over the property or let or give up possession of the property or any part of it without our written agreement beforehand. This will include granting or agreeing to grant a lease or tenancy of all or any part of the property unless you have our written agreement beforehand.

It does not mention lodgers, I believe you can invite people into your home. Does an excluded occupier have rights? It says you must get permission.
I personally think having a lodger is in the lenders interest.

G_M

davidmcn wrote: »

Or maybe she had considered Tesco Bank's mortgage conditions, which do require their consent:

.

I'm surprised at you David!

You must not grant any person rights or allow any person to get rights over the property, create another mortgage over the property or let or give up possession of the property or any part of it without our written agreement beforehand. This will include granting or agreeing to grant a lease or tenancy of all or any part of the property unless you have our written agreement beforehand.

A lodger does not "get rights over the property".
OP would not not "give up possession of the property or any part of it"
Nor would they "grant a lease or tenancy of all or any part of the property"

A lodger agreement would not breach the mortgage terms you quote.


I think this was a typical case of a telephone customer service adviser not understanding the mortgage terms. It's easy to get them wrong.........

hazyjo

Did you mention the word 'tenant' or 'tenancy' when referring to the lodger?

Murphybear

Surely it's in the lenders best interest to allow a lodger. This would increase the owners income and make it less likely they would get into arrears.

billy2shots

Murphybear wrote: »

Surely it's in the lenders best interest to allow a lodger. This would increase the owners income and make it less likely they would get into arrears.

Not necessarily. The extra income can be used to pay off the mortgage quicker meaning the bank makes less money through lack of interest payments.

There's always multiple angles to consider.