Changing to a buy to let mortgage?

Question

Hey, just after a bit of advice. The background: I bought a house around 4 months ago (10%-12% deposit roughly) with the intention of living in it. Unfortunately I no longer have a job that is able to provide me with enough money to cover the mortgage and live. So the only viable option is to rent it out as I'd lose so much if i sold.

Consulted an estate agency they are rushing me, they have someone who can move in within 2 weeks and are sending me the paperwork. I told them I don't have a buy to let mortgage and they said to keep it quiet as the bank may be unhelpful as I've hasd it such a short time.

I see the banks options are possibly:

Say no, I'd have to try and get like 3 jobs or something!

Say yes, but I'm charging you lots and putting up the rates.

Yes, go ahead the changes have been made ^^

The estate agents are fine for me to let it out so long as I sign a piece of paper lying that I have permission. Don't like the idea of this,any ideas on how a bank my react

Answer 1

I personally wouldnt risk it.  I would personally change the payment plan that you are on to pay your mortgage.  e.g if you are on repayment (monthly payments with interest on top) chamge it to interest only (where you pay interest only and have 'something in place' to save so at the end of say 25yrs you have the money to pay it off.  So when you get another job you can change back.   Also you can ring the mortgage company and they can put you through to a department to assess your income and help you out of you cant afford the payments.  Hope this helps but contact your mortgage company - dont take what the estate agent says,

another one woule be to extend your mortgage period - i know with Abbey mortgage they dont charge for this.  You can increase and decrease your payment period many times without a fee

Answer 2

Not advising the bank is mortgage fraud..the agent does not give a d**n about you or your welfare and when the mortgage company find out and you go to prison you can't tell the judge the agent said I shouldn't tell..! Say the tenant moves in and starts a fire accidentally or dies in the property..then what? Your agent will deny all knowledge of his dodgy advice....

At the end of the day agents only care about themselves and what is in their best interests...

Contact the bank and let them know...I did the same with a Chelsea mortgage and they sent me a form to fill and change it from a repayment mortgage to a interest only mortgage which was so much cheaper and that was it!.....prison is not worth it just to get a tenant and to keep a letting agent in a job....

Answer 3

Buy to Let mortgages may only be available if you have a good deposit (I believe they ask for 25%) and the Rent covers the mortgage repayments 120%  ... needless to say, B2L mortgages are ALWAYS a % or 2 above Standard variable Rate ...

... not to mention the fact that chances are you will have to pay and Early Redemption Penalty on your existing mortgage ..

So, to be blunt, right now, chances are, you are not going to get (or afford) a B2L mortgage ..

Answer 4

Renters are much more abusive to houses than homeowners.

The mortgage holder has a right to know that the house is being used as a commercial property.

You should expect to pay a higher interest rate on your loan, because the mortgage holder is taking a greater risk, but, if you are a good credit risk, the note should not be a tremendous amount more. What you should expect is that  the mortgage holder will want the note to ballon to final payment. Usually after 5 years. If your payment record is good for the 5 years, extending the loan should be no problem unless interest rates are signifigantly higher.

The estate agents are not risking anything by asking you to lie. You, however, are risking a potential lawsuit and loss of considerable money. These are the same people that were telling homeowners to refinance with ARM's two years ago. None of them got hurt, but lots of ex-homeowners did.

Answer 5

you can let out your house,think of how many people go abroad to work,yet want to hold on to their home.the most important thing is to let your insurers know you are going to let,or take out buy to let insurance from another company.no need to tell your mortgage company,they are only interested in you keep paying them.why not stay in your home and let out rooms.a house share?i did and get £375 month per room to include all bills,but not food and personal items.if you have 3rooms(one for you)two to let out =£750month coming in,you are allowed £100 week approx for rent a roomscheme tax free! that s£5000 pa.so you would only pay tax on £4000,thats if you let on you have 2people renting a room!