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Renting house without but to let Mortgage

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gibbers
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2009/07/17 12:55:54 (permalink)

Renting house without but to let Mortgage

Hi just wanted some advice me and my ex bought a house last july and she left last october and moved back to her mums. Its up for sale at the mo but all we have had are silly offers.

Obviously she is getting annoyed living back at home and wants to rent the place out, however when i went to the mortgage company they said this wasnt possible without a buy to let mortgage. I know people still rent it out but i have heard if anything was to happen to the house i would be breaking the terms of the mortgage and also insurance.

So has anyone here rented out there place on a normal mortgage or should i just tell her its tough and she just has to wait until we sell the place, after all she was the one who left.

Thanks in advance
#1

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    defected
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    Re:Renting house without but to let Mortgage 2009/07/17 13:35:23 (permalink)
    I was in the same situation as you. But all I had to do was speak to the mortgage company, explain the situation and we had to pay a one off fee of £200 for consent to let, then we could let it out as long as we wanted after that. Had to change the insurance as they base it on a cost to rebuild the house rather than what you paid for it for some reason, but other than that the same.

    After our first mortgage ran out, we switched to an interest only buy-to-let mortgage. (currently 150quid a month because of interest rates) Any extra rent we just put aside for maintenance and if any is left over after that, goes to pay the mortgage off.
    #2
    gibbers
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    Re:Renting house without but to let Mortgage 2009/07/17 13:41:11 (permalink)
    Thanks for that, think i will go speak to the mortgage company
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    Yohimbe
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    Re:Renting house without but to let Mortgage 2009/07/17 14:08:32 (permalink)
    Incredible.  They (the banks) never had the money to buy the house in the first place, but still they created the debt with you agreeing to pay back the full amoubnt of the house plus interest..   on the money they never had.  And then you have the home..  it's yours..  kind of...   but you can't do what you want with it.  A 'one off' fee, consent to let?  Lol.  There will one day be a breathing tax.  I just know it.

    What a funny old world.
    post edited by Yohimbe - 2009/07/17 14:09:45
    #4
    verypc
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    Re:Renting house without but to let Mortgage 2009/07/17 14:15:03 (permalink)
    That happened to me: I had a job offer to move to a different city and didn't get any offers on my house, so I decided to rent it out.  I checked the conditions of my mortgage and it turns out there wasn't any requirement to actually live in the house or even notify the building society that I was renting it out, so I didn't have any problems at all.  

    I suggest you check your mortgage conditions booklet and see what it says.  If the lender says you can't rent it out or that you need to pay a fee, ask them to tell you where it says that in the conditions.  

    It's very important to tell the insurance company though. 
    #5
    mad_cereal_lover
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    Re:Renting house without but to let Mortgage 2009/07/17 15:15:45 (permalink)
    defected

    I was in the same situation as you. But all I had to do was speak to the mortgage company, explain the situation and we had to pay a one off fee of £200 for consent to let, then we could let it out as long as we wanted after that. Had to change the insurance as they base it on a cost to rebuild the house rather than what you paid for it for some reason, but other than that the same.

    After our first mortgage ran out, we switched to an interest only buy-to-let mortgage. (currently 150quid a month because of interest rates) Any extra rent we just put aside for maintenance and if any is left over after that, goes to pay the mortgage off.


    As said, normally you can pay a fee one time to allow you to rent it out.  Depends where at in your mortgage you are and your contract.
     
    I don't understand really about the insurance as I was under the impression that buildings insurance regardless of type of mortgage was always taken against the cost of rebuild.  Unless you are referring to the insurance on the actual mortgage ie. if you get ill and cannot repay the monthly payments etc?  Buildings insurance to my knowledge though is always based on rebuild cost...mine was and I'm not on a buy-to-let.
     
    mcl
    #6
    Wheels
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    Re:Renting house without but to let Mortgage 2009/07/17 15:20:34 (permalink)
    mad_cereal_lover

    defected

    I was in the same situation as you. But all I had to do was speak to the mortgage company, explain the situation and we had to pay a one off fee of £200 for consent to let, then we could let it out as long as we wanted after that. Had to change the insurance as they base it on a cost to rebuild the house rather than what you paid for it for some reason, but other than that the same.

    After our first mortgage ran out, we switched to an interest only buy-to-let mortgage. (currently 150quid a month because of interest rates) Any extra rent we just put aside for maintenance and if any is left over after that, goes to pay the mortgage off.


    As said, normally you can pay a fee one time to allow you to rent it out.  Depends where at in your mortgage you are and your contract.
     
    I don't understand really about the insurance as I was under the impression that buildings insurance regardless of type of mortgage was always taken against the cost of rebuild.  Unless you are referring to the insurance on the actual mortgage ie. if you get ill and cannot repay the monthly payments etc?  Buildings insurance to my knowledge though is always based on rebuild cost...mine was and I'm not on a buy-to-let.
     
    mcl


    Buildings insurance should always be on rebuild cost, otherwise they will pay you out the deprecated value of the house which will not be enough to reinstate it usually.
    #7
    Mobster
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    Re:Renting house without but to let Mortgage 2009/07/17 17:28:23 (permalink)
    Yohimbe

    Incredible.  They (the banks) never had the money to buy the house in the first place, but still they created the debt with you agreeing to pay back the full amoubnt of the house plus interest..   on the money they never had.  And then you have the home..  it's yours..  kind of...   but you can't do what you want with it.  A 'one off' fee, consent to let?  Lol.  There will one day be a breathing tax.  I just know it.

    What a funny old world.


    In fact no different than it has been for 100+ years and right now following the mess. The mortgage will have been based on the owner being present or at least resident. By there nature house brought to be let are not being used, generally speaking, by the owner and so are treated differently (don't think so... ask the land lord on here about the state some are found in). Risk of damages and issues of repair differ. Hence different mortgages. That's without the issue of profit etc.

    By the same token I benefited in a massive way from the whole cock up etc over the last 10 years. Brought a place with a mortgage, properties became over valued, sold mine for about 3-4 times (with ALL fees paid by the council who owned the freehold) and paid my mortgage off after 8 years inc ALL fees covered (as above) and brought outright a place here with the money and used the rest to enjoy myself for 2 years. Touch. I also have pretty always let a room and so have had many tenants.

     
    #8
    Wheels
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    Re:Renting house without but to let Mortgage 2009/07/17 17:34:34 (permalink)
    Mobster

    Yohimbe

    Incredible.  They (the banks) never had the money to buy the house in the first place, but still they created the debt with you agreeing to pay back the full amoubnt of the house plus interest..   on the money they never had.  And then you have the home..  it's yours..  kind of...   but you can't do what you want with it.  A 'one off' fee, consent to let?  Lol.  There will one day be a breathing tax.  I just know it.

    What a funny old world.


    In fact no different than it has been for 100+ years and right now following the mess. The mortgage will have been based on the owner being present or at least resident. By there nature house brought to be let are not being used, generally speaking, by the owner and so are treated differently (don't think so... ask the land lord on here about the state some are found in). Risk of damages and issues of repair differ. Hence different mortgages. That's without the issue of profit etc.

    By the same token I benefited in a massive way from the whole cock up etc over the last 10 years. Brought a place with a mortgage, properties became over valued, sold mine for about 3-4 times (with ALL fees paid by the council who owned the freehold) and paid my mortgage off after 8 years inc ALL fees covered (as above) and brought outright a place here with the money and used the rest to enjoy myself for 2 years. Touch. I also have pretty always let a room and so have had many tenants.


    Don't start him off; multi-occupancy is one of Yohimbe's favourate pet hates.
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