Do I really need a buy to let mortgage?

alibongo42

Last year I applied to my lender for permission to let my house (on a residential mortgage). I had to pay an admin fee (£100), and complete a form.

One of the acceptable reasons for getting the permission, according to the form, was getting a job with accomodation included.

It'll depend on your lender, but you have a good chance of this being very straightforward and being allowed to keep your residential mortgage.

Ivrytwr3

I'm with A&L and we got a "consent to let" and cost £125 admin fee (pah!). But it keeps you in terms with your mortgage and should a claim be needed your insurance will not be invalidated as it may be if you you breached your terms.

The consent will last 3 years and then another application and fee will be payable, but each lender will be different.

Although many do not get this and let withought their lender knowing (and get away with it!) I don't condone this especially with the amount of money involved with a property.

moneysavinmonkey

JimJohn wrote: »

Thanks everyone.

The last thing I'd want to do is commit fraud, hence this thread.

On the other hand, as we've no other mortgage, I still fail to see the relevance of whether we've got tenants as long as we pay the mortgage and get suitable insurance. Never mind, the lenders make up the rules, not the likes of me!

You don't own your property until the mortgage is paid off- so the lender still has a say in what you can do with it!!

If you rent the place out then for whatever reason stopped paying the mortgage and the house got repossessed the mortgage company would have to legally evict the tenants which could take some time. So it changes the situation and the lender need to know where they stand. They have every right to refuse but in practice most will give 'permission to let' for a small fee.

snoopy78

brit1234 wrote: »

Just type in mortgage fraud on the FSA site and you will see the clamp down they are doing with the CML. They are now dealing with both in false mortgage types but also use of gift deposits (newbuilds). Lots of examples in local press as well as well as Panorama a couple months back about the FSA stepping up a gear (a bit of closinfg the gate after the horse has bolted. As for the police it is a very simple arrest and a lot easier to charge compared with the old legislation.

The lenders are increasingly willing to act as it puts them in greater financial risk especially as they are trying to reduce their losses.

The FSA are a bunch of clowns they can’t stop the banks committing fraud everyday, by inflating asset values and not realising the full extent of their losses. They thought that NR had a good business model and signed off on it.

Whilst technically it is fraud to not notify the bank regarding a change in the use of a house, I am also told it is fraud not to notify the bank if someone new comes to live with you for a extended period of time, eg like a new partner. It’s also fraud to not tell the bank if you the co-mortgager stops living and paying for the property or you take a significant pay cut or any other type of change in your life that effects any type of financials.

Effectively the only winners in forcing people to get buy to let mortgages are the banks as they can charge huge fees for the products. Just make sure you pay your mortgage on time, and if you have any problems with possible repossession let you tenant know straight away as you owe the tenant a duty of care, screw the banks!

Icey77

Ivrytwr3 wrote: »

I'm with A&L and we got a "consent to let" and cost £125 admin fee (pah!). But it keeps you in terms with your mortgage and should a claim be needed your insurance will not be invalidated as it may be if you you breached your terms.

The consent will last 3 years and then another application and fee will be payable, but each lender will be different.

Although many do not get this and let withought their lender knowing (and get away with it!) I don't condone this especially with the amount of money involved with a property.

Same here, although now that I need to remortgage (i'm coming to the end of my fixed rate period) I "have" to stay with A&L as I do not have the equity to change to another mortgage lender on a BTL mortgage.

Icey77

JimJohn wrote: »

I'm currently living in a flat with my wife and in June she's getting a job which comes with a house.
Our mortgage deal is on the point of running out and everybody is saying we need a buy to let mortgage. However, we are not dependent on rental income to pay the mortgage; does that not count for anything? I fail to see the relevance of whether or not I have tenants as long as I'm properly insured.
Can somebody please enlighten me! Cheers.

Do it by the book and you shouldn't anything to worry about. Any good LE will require proof from the mortgage company that you have permission to let out if you wish to rent your property.

At least the costs for this permission are an allowable expense when it comes to doing your tax return :rolleyes:

Also, I got info about Landlord insurance from this board - Landlord Mortgages I think is the website, they offer insurance should your tenant or a trades person injure themselves on your property that wasn't their fault - eg a cupboard falls on their head

snoopy78

And while I'm at it the whole gift deposit thing is not illegal and should not be made illegal, I recently seen a report on TV regarding this and it was a joke.

Deposit gifts in themselves are no problem, what is a problem is the valuators saying the flat/house is worth X amount when it clearly is not. Lets not forget the valuator will not be valuing the house/flat with the gift deposit in mind, he knows that someone is going to buy or not buy on his professional advice, even if the contract is between him and the bank he is fully aware that his advice will effect someone’s decision.

These guys are paid a lot of money for a so called professional knowledge of the housing market and as such should give careful a reasonable estimate of what the property actually is worth at the time of valuation.