Live-in landlord denied?

00ec25

Socajam wrote: »

The house is not yours until you made that last mortgage payment - failure to make payment(s) means the bank can take it at any time.

incorrect. Do you not understand what a mortgage is ?

legally the OP owns the house from the outset as explained

the mortgage is a loan secured against the house

the mortgage is nothing more than a (legalese) contract between the lender and the borrower under which the borrower agrees to repay £x

the contract contains a clause stating that failure to repay £x means the lender can take legal action to repossess the property. To do so the lender goes to court and it is the court which gives the lender the legal authority to then sell on behalf of its legal owner.
Any money received from the sale is used to clear the loan, anything left over is money belonging to the legal owner of the property.

during that entire process the property remains the ownership of its owner. The legal action is for breach of contract, not to "take it away" as you seem to think.

kuratowski

It's true that in everyday speech, people often say something like, "the bank owns more of the house than I do", especially if they start out with a mortgage in the realms of 90% LTV, but that's not an accurate statement, at law. In fact, as the owner you bear 100% of the risk of changes in value of the house, no matter what % the lender has advanced.

rpgo

sammyjammy wrote: »

I get a feeling your journey to having lodgers is not going to end well.

Care to elaborate? I might have shown some of my inexperience and ignorance here, but I like to think when properly directed, I learn and do quite well.

diggingdude

rpgo wrote: »

Care to elaborate? I might have shown some of my inexperience and ignorance here, but I like to think when properly directed, I learn and do quite well.

Do your research, vet lodgers well and you should be fine

zagubov

If you are in England (or possibly Wales), your lodger is not a tenant and you must scrupulously resolve to never use the words tenant or tenancy in any of your dealings, so that you do not cause confusion.

You may want to fit a lock on your own bedroom door. The lodger's room can only be allowed a bolt at the most.

You might need to check your house insurance.

You need to be upfront with rules.

Lay down sensible rules about visitors and guests, cleaning and washing up, noise and access to shared facilities, payment deadlines and notice needed to quit before they hand over money or move in.

If you are in Scotland, a lodger is a little bit more like a kind of tenant so you'll need more specialist advice.

davidmcn

rpgo wrote: »

I did, 6 months ago and several times, but then again english is my second language and it is hard to follow all the thick legalese/jargon/technical terms.

Then get somebody else to help you. Or tell us who the lender is and we can check their standard conditions ourselves. They're usually in relatively plain English these days so shouldn't be that difficult eg from Nationwide's conditions :

You must not change the use or occupation of the property without our written
consent. This includes leasing, letting, licensing or parting with possession of it, or
any part of it.

rpgo

davidmcn wrote: »

Then get somebody else to help you. Or tell us who the lender is and we can check their standard conditions ourselves. They're usually in relatively plain English these days so shouldn't be that difficult eg from Nationwide's conditions :

My mortgage is with Natwest.

You must not change the use or occupation of the property without our written
consent. This includes leasing, letting, licensing or parting with possession of it, or
any part of it.

Assuming I forbid lodgers from registering a place of business with the address, I think taking lodgers would only fit into the licensing part of it, maybe.

davidmcn

rpgo wrote: »

My mortgage is with Natwest.

Ok, then these are the mortgage conditions (which you say you've already read), and clause 3.4 says:

3.4 You will obtain our permission in writing before...
• giving up or sharing possession of the Property, or
granting any lease, easement, licence or right to
occupy the whole or any part of the Property;

If you have a lodger then at the very least you are sharing possession of the property, so you'd need to seek permission from the bank. They don't need to give you permission.

Honeylife

OP
Forget the mortgage bit for a moment. You have clearly confused NatWest and may I say yourself a wee bit with terminology.

NEVER EVER SAY OR USE "TENANT" IF YOU ARE A LIVE IN LANDLORD

You want a Lodger/Excluded Occupier/Licensee. Get one.
Inform your House Insurance & the Local Authority (register them on the Electoral roll)
Go to Ryman/WH Smith buy a Licence Agreement.
Get potential lodger to sign it, when they paid before you hand keys over.
Rent your room out. If you go over the 7,500£ per annum contact your tax office.
(if you are going to go over this amount with one lodger - then go ahead and get two lodgers)
Do a search on this site for lodgers and read everything written by very experienced Live in Landlords.

Check out Spareroom.co.uk and read all their Advice. Helpful to see what people are charging in your neighbourhood.

Recommend http://lodgersite.com/

G_M is one of our most astute on this issue of Lodgers so tend to go along with most of what he suggests.

If you are still nervous, rent the room out to your third cousin twice removed, and tell the mortgage company its just family!

Good luck