Letting out flat - fees/mortgage company

carron81 | 00:40 Sat 21st Jun 2008 | Property

12 Answers

Hi

I'm having to let out my flat and I've heard people talk about asking your mortgage company first. Has anyone had to do this and can they say no to renting out your property?

Also, is there any fee for this? I'm going through all my mortgage paperwork and there is one page that has a whole load of boxes with fees. Theres one box that says "Letting Fee Annual �100" and thats it. Theres nothing else I've seen in any of the paperwork I have that mentions letting

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Ethel

It is normally a condition of your mortgage that you live in the property and you need their consent to let it out.

This is because if they ever need to repossess it is so much more difficult with third party tenants.

Your mortgage repayments will probably increase (not always) and you have to inform your house insurance companies - the buildings insurance will certainly increase.

Velvetee

You will need to tell them and they will transfer your mortgage to a Buy to let. You can either opt for interest only or repayment, repayment will work out considerably more expensive. Incidentally, any buy to let mortgage will be more expensive than a residential one.

Ethel

In the long term, interest only is the more expensive as you are never paying off your debt so are consequently paying interest on the full amount for the full term

carron81

Question Author

oh god, how much could it go up by? i'm already paying a fortune for my mortgage and if it goes up any more I'll be in reall trouble

i'll need to give northern rock a call

Ethel

It may not go up at all, but there is a possibility that it may.

Without my crystal ball to tell me who you mortgage company is with, the terms and conditions of your mortgage and all other relevant facts, it is impossible to say.

Monday morning, phone your mortgage company and discuss it with them.

That has got to be better than speculating.

It is enough to know that yes, you do have to get the consent of the mortgage company before you let, and yes, it may increase the mortgage costs.

carron81

Question Author

Thanks, I'll be on the phone to Northern Rock first thing Monday.

Twenty20

Its very probable that Northern Rock wont be interested in you switching to a Buy to Let mortgage with them. They'll probably encourage you to go elsewhere. Northern Rock need people to pay off their mortgages or to transfer them to other lenders so they can repay the Government.

carron81

Question Author

What would happen if they said no and we let it out anyway?

Me and my boyfriend are in quite an awkward situation. We're not living in the flat, cant afford all the bills. So our only option is to try and rent it whilst its up for sale and if our mortgage company doesn't let us I don't know what we'll do

carron81

Question Author

hi

been on the phone to northern rock this morning. for anyone thats in the same position as me this is what they said.

they charge a one off payment of �100 if you let your property out for 12 months if its going to be over 12 months its �250 but..... they send out a pack that you have to fill out and send back to them to asses whether or not they will give you permission to let out the property.

i'm waiting on the pack so fingers crossed. they did say they're quite quick at making a decision once they have your pack

Ethel

Well done.

I would strongly advise anyone against letting a mortgaged property out without getting the company's consent or at least informing them.

DSJ

Why not ring your mortgage holder & ask for advice?

carron81

Question Author

hi ethel - yeah, definately getting there permission before i do anything. i don't seem to be having much luck just now so wouldn't want to make things worse!!

gave them a wee call a minute ago. they cant really do anything until l i fill out the letting pack and get it back to the underwriting people. they said each case is different and they'll take everything into consideration e.g if we'll be making a profit, using a letting management company, how high the mortgage is etc

just got to pace the floors now till i get the forms. its such a pest all the waiting about to find things out then I discover something new thats to be done. never a dull moment just got to hope i dont go into labour in the middle of sorting all this out!!!! hehe

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