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NRAM and consent to let - what would you do?

(4 Posts)
AddictedtoCrunchies Tue 05-Nov-13 12:59:13

I have an interest only mortgage with NRAM on the general rate as my fixed rate ended a few years ago. Monthly payment is £378.20 interest only.

We put the house up for sale summer 2012 but it wouldn't sell so we obtained a Consent to Let (CTL) from November and rented it out; we moved into rented and are very happy.

Our tenants were a complete nightmare, didn't pay, trashed the house etc (that was a whole other thread) but we got them out and some new (lovely) tenants moved in from July and signed a 12 month contract at £525pm. NRAM has just agreed another year of CTL but implied from their letter that we'd need to see an IFA as the agreement couldn't go on indefinitely.

House value is c£110,000 and mortgage is c£101,000 so not much equity. My salary is c£33,000 and DH's is c£25000. But he has a terrible credit rating due to being in a DMP. I (we) also have a loan for c£15,000. So bit rubbish really sad.

I think my options are:

1. Move back in. (Don't want to as too small, miles from son's school, town centre location whereas we now have a garden and are ten mins from school/parents. However if we HAD to, we would but it would mean losing our lovely rented semi for which we're only paying £640pm rent.)

2. Try and sell. (We are literally potless at present due to ex-tenants screwing us over. So affording estate agents fees would be a challenge.) Original plan was to sell in 4 years time when DMP and loan finish and we have an extra £1k a month disposable income.

3. Try and remortgage to a BTL. (My salary should be OK but not enought LTV so can't see anyone taking us on).

4. Throw myself on the mercy of NRAM and ask for CTL for another few years until we can get sorted.

I understand from MSE that NRAM are trying to run their book down so 3. probably won't be an option. I can only see selling as an option right now although I appreciate we won't have to make a decision just yet as we have 12 months CTL agreed.

And what would you do? I work full time and job is secure (or as secure as it can be). Married with one five year old son.

Any advice would be greatly appreciated.

I would plan to sell in July when current tenants leave. Your own financial position is too precarious for you to make good landlords - if the boiler dies or there is a major leak you will have great difficulty affording it. And even lovely tenants can have problems of their own which may mean they can't afford the rent.

I can't see any advantage in waiting another few years until OH's DMP is finished. It's a bet on house prices rising AND tenants not giving any trouble AND there not being any problems with the house.

For me, I would rather get rid of it and keep my life simple. Both working, own debts, 5yo - that's a busy life!

And if you do end up with a thousand or two from the house sale, you could consider using that to make full&final offers on samoe or all of OH's debts, see debtcamel.co.uk/debt-options/less-common/full-final/. That would actively help your current situation.

(I don't make any money from any links in my posts)

AddictedtoCrunchies Tue 05-Nov-13 14:05:08

Thank you. You've written down what I was thinking.

Ironically, the boiler packed in two weeks ago so we had to pay £1400 to have it replaced yesterday. Just about finished us off.

Thanks for your advice. That link has some really useful info.

rallytog1 Wed 06-Nov-13 18:08:17

If you don't mind me asking op, how did you get consent to let with that level of equity? We applied to nram around the same time as you but they told us we needed at least 35% equity for them to even consider it!

In your position I would also look to sell by the way. Renting a house out can be a real millstone around your neck, as you are obviously discovering! You'll probably sleep better without the worry of how much it's costing you.

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