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Renting out your house but NOT telling the mortgage provider

41
Found 8th Dec 2011
Good Evening All,

Would just like to know what people think of this ????

Ive seen an independent financial adviser and he says loads of people are doing it.
I know its not the honest thing to do, however im told by many other people that as long as the mortgage is getting paid then obviously they are happy.
Im also told that more and more people are doing it to avoid over inflated fees that the providers charge and also silly increases in monthly payment as a result of telling them.
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MiscMortgage
41 Comments
You do know it invalidates all insurances too (home and contents)...... as long as you're sorted though and can work with the tenants on a "verbal only" rental agreement, it's all good as long as everyone's happy....
Breach of mortgage agreement.
whatsThePoint

just make sure you tell your insurance company



That's irrelevant - if there's not a buy-to-let or similar mortgage attached to it then there's no cover - same for contents, if you're not in the property for (usually) 60 odd days in the year then you're not covered with standard contents insurance.
not recommended as it is a breach of your contract and they can sue you for fraud as this is fraud alright.

also you will not be able to forward all the statements and correspondence about your mortgage to your new address.

i suggest you go to see another IFA, as this one sounds bent.
I was worried about the Insurance part to it all............. i have been also told (unsure if this is true).
That you can still purchase Landlords insurance (even though you have not notified the mortgage company).......is this correct????

As obviously there would be no point buying insurance if it was invalid.................the MASSIVE downside to this is simple - if you have no insurance and have a bad tenant then potentially MASSIVE PROBLEM if property burns down - especially if there were in it.

For the record i am wanting to use a Letting Agent and do it all above board on the tenancy agreement side - just want to avoid the silly mortgage fees as it makes the margins on rental income / mortgage cost very tight...............this is due to a very very very inflated fee by the provider.
nick1981

I was worried about the Insurance part to it all............. i have been … I was worried about the Insurance part to it all............. i have been also told (unsure if this is true).That you can still purchase Landlords insurance (even though you have not notified the mortgage company).......is this correct????As obviously there would be no point buying insurance if it was invalid.................the MASSIVE downside to this is simple - if you have no insurance and have a bad tenant then potentially MASSIVE PROBLEM if property burns down - especially if there were in it.For the record i am wanting to use a Letting Agent and do it all above board on the tenancy agreement side - just want to avoid the silly mortgage fees as it makes the margins on rental income / mortgage cost very tight...............this is due to a very very very inflated fee by the provider.



they might not seem so silly if you have any problems with the tenant etc , they way things are these days, I'd do it all above board.
your bad tenant could also shop you to the mortgage provider.

i would advise do everything above board. if you don't like the fees for letting, then switch to a buy to let mortgage.

there is also tax implications as technically speaking you can't claim the tax rebate on the interest as you are pretending to be living there.
oh, loads of people are doing it? That's fine then, join in!!!

Cannot argue with that point at all mate - like i said, i was putting out the feelers to see what people genuinly thought, so i fully take on board people opinions that think its a bad idea... however i am keen to listen to those that would consider it / or may even be doing it just not admitting to doing it !

richp

they might not seem so silly if you have any problems with the tenant etc … they might not seem so silly if you have any problems with the tenant etc , they way things are these days, I'd do it all above board.


I wouldn't worry about it. I was living in my house under a BTL mortgage for 5 years. No-one care even though i get all my post sent there. Just do it and if they catch you (which they wont) say you didnt realise you couldnt.
Who's your mortgage with out of interest? Also im pretty sure the insurance aspect of it would be fine
nick1981

Cannot argue with that point at all mate - like i said, i was putting out … Cannot argue with that point at all mate - like i said, i was putting out the feelers to see what people genuinly thought, so i fully take on board people opinions that think its a bad idea... however i am keen to listen to those that would consider it / or may even be doing it just not admitting to doing it !



well, it won't be very clever for them to admit to millions of people on a public forum would it?
gbspurs

I wouldn't worry about it. I was living in my house under a BTL mortgage … I wouldn't worry about it. I was living in my house under a BTL mortgage for 5 years. No-one care even though i get all my post sent there. Just do it and if they catch you (which they wont) say you didnt realise you couldnt.



Ignorantia juris non excusat or simply, ignorance is no defence !
gbspurs

I wouldn't worry about it. I was living in my house under a BTL mortgage … I wouldn't worry about it. I was living in my house under a BTL mortgage for 5 years. No-one care even though i get all my post sent there. Just do it and if they catch you (which they wont) say you didnt realise you couldnt.



Surely that's the wrong way round?
Benjimoron

Surely that's the wrong way round?



there is nothing wrong with living in BLT property yourself as that is better for the lender since they have more security.

this is not the case with renting out a property that you are supposed to be living in. the lender is taking on more risk hence the fee to let.
Some lenders do only charge a small admin fee £50-£150 for changing it to a buy to let. Others obviously a percentage. So it may be worth while just giving your lender a call, don't tell them you are going to do it, you are just enquiring about it for the future. Hopefully it will just be a small admin fee. x
mutley1

there is nothing wrong with living in BLT property yourself as that is … there is nothing wrong with living in BLT property yourself as that is better for the lender since they have more security.this is not the case with renting out a property that you are supposed to be living in. the lender is taking on more risk hence the fee to let.



Exactly, hence why I wondered what the fuss was about, the lender was probably able to charge a higher rate for less risk!
p.s.. You can have your statements sent to a different address. You are not living there at the moment, you work away and want all correspondence forwarded to ....... etc
Benjimoron

Exactly, hence why I wondered what the fuss was about, the lender was … Exactly, hence why I wondered what the fuss was about, the lender was probably able to charge a higher rate for less risk!



well, gbspurs has overpaid and would have done himself a favour by switching it back to a normal residential mortgage whilst he was living there.
gbspurs

I wouldn't worry about it. I was living in my house under a BTL mortgage … I wouldn't worry about it. I was living in my house under a BTL mortgage for 5 years. No-one care even though i get all my post sent there. Just do it and if they catch you (which they wont) say you didnt realise you couldnt.



a bit difficult to say this whilst trying to keep a straight face as they will ask. how come all your other letters get addressed to a different address except your mortgage papers? oversight?
gbspurs

Who's your mortgage with out of interest? Also im pretty sure the … Who's your mortgage with out of interest? Also im pretty sure the insurance aspect of it would be fine



why? are you going to shop him?
Rather than have to get a different/worse rate with BTL, ask your bank for a CTL (consent to let).
Mortgage rates will be the same as regular mortgage deals, all you need is for them to agree every year, and have the property vacant before letting for three months.

Edited by: "JonnyTwoToes" 8th Dec 2011
You aren't suppose to live in a home that you have a BTL mortgage for either. Or have a BTL motgage in your name and rent it out to family. If people think I'm incorrect that's fine I can live with it. Tinklebell is just stressy with me because I made a comment on the nature of her posts.

We can all be preachy and we all know that what the OP wants to do is wrong but to compare it to stealing is pretty stupid.

Ultimately OP do what works best for you, I stand by my view an others can stand by there's. Mortgage advisers know how to play the game (I was an estate agent who also know how to play the game) so he won't give you advise that will get you arrested!
Oh I should clarify my position. Reason why I did a BTL (don't live there anymore it was a while ago) was because I was working in a commission based job and wanted to buy a house on my own with the deposit I had raised and knew that I could do it this way but not residentially. Essentially it made me a homeowner at 20 and i have since moved on and rent it out so I'm happy about the choice.
As jtt says, approach your mortgage company and ask for a consent to let, they will charge an admin fee but not change the mortgage product / interest rates, this way you are covered, can obtain landlords insurance etc and let through a letting agency, who have to ask and get you to sign that you have permission from the lender to let
Bossyboots I always try and do the right thing but sometimes you have to play the game. like I said the mortgage adviser knows the score, he isn't stupid and wouldn't give that advise if didn't know it worked.

I also know for a fact that in this scenario you can plea ignorance and I have also known lenders turn a blind eye since the only thing they really care about is getting their payments on time.
Hi guys - ive read your posts and do enjoy reading the differing opinion.
I must add - i am aware it isnt "correct" - however i think whilst most people seem to be giving gbspurs a hard time, i must say (and only from word of mouth), but i am aware of increasing more numbers of people doing it, hence why i opened the discussion.

With regards to my own personal circumstances the current provider have advised they will apply an increase to my current rate of 1.5% - it may not sound alot but on a monthly basis it does increase the amount to a reasonable amount.

However it does seem pretty clear that most people think i should notify the provider - and based on this, i believe this is the path to go down.

Thanks for all your feedback

Haha dont worry i appreciate the issue fully.......
lots of people do lots of things they shouldnt, some get away with it some dont........often its only when you get found out that you wished you hadnt done it............and on the same token im pretty sure the ones that dont get found out will always think they made the correct decision too.

bossyboots

Please dont go with the "lots of others are doing it so it must be okay" … Please dont go with the "lots of others are doing it so it must be okay" theory as that is just ridiculous


Best of luck mate I hope it works out for you
The chances of you getting caught are extremely slim.
Life's all about risks and rewards.
OMG stalker! Evidently I was wrong there and I'll hold my hand up.

You'll notice in this thread I gave my opinion based on my own personal experience and it was infact you who came into the thread to say im wrong but don't let that get in the way of good vendetta. I didn't realise that posting an opinion in a thread asking for advice was so offensive.
Pathetic. I admit I'm wrong, say nothing personal about you, and say that i was only saying my opinion and you decide to be rude and offensive about me.

Also my comments in this thread are my opinion. I'm entitled to it and not only that but I am using experience of the same situ so what makes you think your opinion is more valuable than mine. Let's just leave this as I have tried to be reasonable and your just out to abuse so we aren't getting anywhere.
gbspurs

Pathetic. I admit I'm wrong, say nothing personal about you, and say that … Pathetic. I admit I'm wrong, say nothing personal about you, and say that i was only saying my opinion and you decide to be rude and offensive about me. Also my comments in this thread are my opinion. I'm entitled to it and not only that but I am using experience of the same situ so what makes you think your opinion is more valuable than mine. Let's just leave this as I have tried to be reasonable and your just out to abuse so we aren't getting anywhere.



come on tinkerbell and gbspurs, kiss and make up. gbspurs is right. he is only quoting what he believes is true which everyone is entitled to do whether they be correct or not.

gbspurs mate, you did accuse tinkerbell of stalking and that is the worst insult you can give a woman bro. women don't stalk, men do.
jellybaby22

Was the original gbspurs comment not said Tongue in cheek.... Don't think … Was the original gbspurs comment not said Tongue in cheek.... Don't think anything bad was meant ....



sometimes people just don't know how to crack a joke without offending others.
I don't hold a grudge, if I have offended you in the past I apologise although the comment your referring to was clearly meant in jest. A vast amount of misc is having fun and taking the mic as well as sharing advice and opinions, and like all of us I can get things wrong or cross the line. However i will always respect Peoples views and applogise if I believe I have made a mistake.

Like I say I have no issue with you and I will happily converse with you in another thread in the future ( who knows we may even end up agreeing on something)

See you around
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deleted265520
gbspurs do you own wotnot lulz
I wish!
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deleted265520
gbspurs

I wish!



The bloke who owns it must make a killing.
It's all well and good skipping these things until something goes wrong with the tenant. Remember you're dealing with renting to human beings so things WILL go wrong, unless you can be sure you'll only be renting to the most reliable, Ned Flander-esque people on earth.
tinkerbell28

That's fine spurs I may even send you nudez. We've kissed and made up.



if so, please do not send one of you as he probably wouldn't appreciate it.
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