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Original poster

Informing Mortgage Lender about renting out propert DH and I disagree

39 replies

Rentahoose · 01/11/2013 21:24

We are currently unable to sell our property and as we are severely overcrowded we are going to rent out our house once we have bought out a new property.

DH doesn't want to tell lender as he says a buy to let mortgage will be much more expensive and we won't be making much money on the rental anyway (after repairs and agency fees).

I've read that some mortgage lenders are happy to grant permission to let mortgages and will charge a fee rather than put you onto a new mortgage rate.

I would rather play it straight because I don't want the mortgage company to repossess our house (which they can do if they find out) or to find out our insurance is invalid if anything happens to the house.

Also I do not want to stay on the electoral and get our post forwarded. I feel we should be able to enjoy living in our new house without all this cloak and dagger stuff.

DH view is that the only person being hurt is the bank and they're quids in anyway. He says loads of landlords do this but I am not comfortable with it.

I know this isn't an imprisonable offence but I feel if he and I disagree over it and he refuses to tell lender then he should be prepared to take on the entire risk.

OP posts:
specialsubject · 01/11/2013 21:27

not to tell the lender is mortgage fraud, which is grounds for repossession.

And your insurance WILL be invalid. So if your tenants wreck it/burn it down/won't leave etc etc you have NO comeback.

any more reasons needed?

RevelsRoulette · 01/11/2013 21:31

He knows the risks and he still says the only person who could get hurt is the bank?

What has he said he will do if the tenant trashes the house? Or gets credit in your name and you end up with ccjs? or the mortgage company takes the house?

Or is he one of those ridiculous people who says something won't happen because he doesn't want to face the fact that it is possible that it could happen?

EachAndEveryHighway · 01/11/2013 21:32

So you are able to buy a new property without selling the house you currently live in?

Well you really can't be that skint then.

Will you declare the existing mortgage to the new lender? I think you could be in serious trouble re fraud if you don't.

I actually speak as someone who didn't declare to my mortgage lender that I was letting the house, but that was because I was seriously skint at the time, and the rent didn't even meet the mortgage payment. I did declare it in terms of tax though to HMRC.

I would think carefully about your priorities.

Original poster
Rentahoose · 01/11/2013 21:32

So what do I do? LTB?

I've emailed him lots of articles about it and hoping he will change his mind. I will not be redirecting my post anyway or keeping myself on the electoral role.

What recourse do I have if he goes ahead? I suppose I could just phone the lender myself (just have to dig out the details somewhere) but mortgage comes out of his salary so don't really want to do it behind his back. I've made my disapproval clear.

OP posts:
Auntidote · 01/11/2013 21:34

What do you do?

Ring the mortgage company yourself. Then tell him you did it. Like any sensible adult.

Original poster
Rentahoose · 01/11/2013 21:35

We aren't flush. We part own this property and relatives of his are helping to raise a large deposit so we can get a new mortgage at a very low rate.

The rental will cover this mortgage.

I realise we sound lucky but if you had to live in a tiny one bedroom house with two children, I think you see why I need to get out.

How many people want to share beds with their children for ever?

OP posts:
EachAndEveryHighway · 01/11/2013 21:37

Sorry, didn't mean to sound so critical of you, skimmed over the fact that it's your dp not you who's being the arse. And I'm guilty of double standards, I'm aware of that, but your situation sounds more precarious.

Original poster
Rentahoose · 01/11/2013 21:39

Yes the new lender knows. I've emailed his mum to tell her what he is planning in the hope she'll convince him.

Please don't think I'm not a sensible adult Auntidote. I come from a totally law abiding family. That's why I don't want to do it. I'd rather break up the family than do it .

My priorities are to my children. I would like them to not have to share a bedroom with their parents. Otherwise we wouldn't be trying to move.

OP posts:
specialsubject · 01/11/2013 21:40

any sympathy is rapidly evaporating, but if you look into doing it properly and legally you will find that you can claim quite a few expenses of rental against the tax on the rental payments, so it may well work out better than you think.

oh, and you can only get post forwarded for two years.

tell you what - why not do it legally? Why have all the worry about getting found out (and you WILL be), having the place repossessed, a lifetime of CCJs etc etc...

lots of people do break the law. So that makes it ok for you to do it too?

SteamWisher · 01/11/2013 21:42

You can tell the lender, end of.

Original poster
Rentahoose · 01/11/2013 21:44

"any sympathy is rapidly evaporating"

What have I done to upset you? I think that is unnecessarily harsh.

I'm not breaking the law. I haven't been involved in any of the financial arrangements (too busy with the DC) I was just asking for advice so I could try to do the right thing. Whether that be shopping my DP or ...whatever

Totally unfair

OP posts:
Auntidote · 01/11/2013 21:45

As you're law-abiding, stop bothering about getting your partner's "permission" and just tell the lender. You may need to get a "consent" to let it out. That's been no problem the twice I've done it and there's been no change to the interest rate. (Though there will be at the end of the deal I am on)
You'll need to tell your buildings insurers too. Those are the 2 important ones.

Original poster
Rentahoose · 01/11/2013 21:46

Well I've told DP I don't want to be involved, I've shopped him to his mum and if he doesn't budge I will tell them myself.

Thank you for your advice

OP posts:
Auntidote · 01/11/2013 21:47

(It's probably not illegal not to say. But if it's a breach of mortgage/insurance conditions you don't want to go there or you wouldn't have the financial security/protection you need.)

SteamWisher · 01/11/2013 21:49

What's his mum got to do with it? Is he 9?

You're both on the mortgage, you ring them if he doesn't.

BettyBotter · 01/11/2013 21:49

How can you possibly stay on the electoral role there when you have tenants. They will receive and complete the electoral register and cross your names off the address.

Mortgage companies will usually give permission to let out your house if it's a temporary situation. Ours allowed us to do so for a couple of years with no charge or change of rate.

RevelsRoulette · 01/11/2013 21:49

obviously he'll be declaring this income for tax purposes, so it is ridiculous to try to hide it from the mortgage company with all the risks that brings. it simply isnt worth the risk and i hope he eventually realises that and not after something happens and you suffer a huge financial loss.

Original poster
Rentahoose · 01/11/2013 21:51

It's not about getting his "permission". But because I've been doing all the childcare while he's been out meeting various IFAs, solicitors etc, I am not totally up to speed with everything that has gone on.

I'm sure I can dig out the paperwork. All income will be declared for tax puposes and will let tax credits know.

OP posts:
LittleBearPad · 01/11/2013 21:52

You've shopped him to his mum... Just tell him you'll call the bank and tell them. Why do you need to wait for him to do it

Original poster
Rentahoose · 01/11/2013 21:52

"What's his mum got to do with it? Is he 9?"

She's in housing and knows a lot about it- he listens to her.

OP posts:
peppapigmustdie · 01/11/2013 21:52

I work at an accountants and you can claim a lot of the costs back. Look into it before your decision.

Original poster
Rentahoose · 01/11/2013 21:54

"You've shopped him to his mum... Just tell him you'll call the bank and tell them. Why do you need to wait for him to do it"

Well ideally if I want to save this relationship I would like to try to come to some sort of adult agreement about it ( I blame the influence of a member of his family who is a landlord and who I think has been giving him terrible advice)

OP posts:
Original poster
Rentahoose · 01/11/2013 21:55

"How can you possibly stay on the electoral role there when you have tenants. They will receive and complete the electoral register and cross your names off the address"

That is not actually something DP has suggested it's something that was mentioned on another mumsnet thread on the subject.

OP posts:
Original poster
Rentahoose · 01/11/2013 21:57

"I work at an accountants and you can claim a lot of the costs back. Look into it before your decision"

That's why I think it won't cost much more.

Also reading up on it we might get a permission to let clause rather than have to get a buy to let mortgage. After all we have been living here 7 years. We did not buy to let and we've paid every month on time.

OP posts:
AandAmom · 01/11/2013 22:11

I work for one of the biggest banks dealing solely with people who let out their residential homes. You won't need to change your mortgage to buy to let it will be consent to let, usually your mortgage company will either add a % on to your current rate or if you have a mortgage that is tied in with penalties they will let you stay on rate. Some companies charge just a one off fee to place consent to lease on your file. You will need landlords insurance. You can only redirect your post via post office for 12 months so after this time you will have to change your address with mortgage company and this will red flag to them asking you about your two homes. We have many customers call us to just ask our policy without giving their account details, do this to get your mortgage co policy.

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