Can you rent a house when you have a normal mortgage..

If you have a mortgage and decide to rent out your house, can you do this, someone told me you had to have a buy to let mortgage

If you are honest

If you have a mortgage and decide to rent out your house, can you do this, someone told me you had to have a buy to let mortgage

It depends from lender to lender. It is called consent to lease, for instance the Halifax will generally allow you to rent out your property, if your mortgage has not been in arrears has been held for at least 12 months and there is a good reason why the consent to lease is required. Other lenders may not allow you to rent out at all and insist that you remortgage onto buy to let. This has the complications that Buy to lets are not generally available at high loan to value ratios, carry high arrangement fees and will require a solicitor to do the legal side of the transaction.

The first port of call would be to talk to your lender and see what facilities are available for consent to lease, then if you need to look at but to lets, talk to an independent advisor who could point you in the right direction as to the best deals available

But do you have to declare this to your lender, could you just rent out your property and not even declare it, surely they would not even know.?

Hi Yes as i have done this. You have to declare it to you morgage lender and there may be a charge. In my case £250 . Also the condition was that the house was managed by a letting company and the insurance was amended. Also you may have to amend any life/critical illness insurance policys

It's honestly not worth the risk

Definately tell your lender.

It will depend on your history, LTV etc..

It's honestly not worth the risk, it could land you in lot of trouble and it's easy for your lender to find out, after all, if you move out you can't allow personal and sensitive post to be sent to your tenant. An obvious tell to a lender is when someone with a mortgage requests a correspondence address change.

 

If you don't update your building insurance and your tenant destroys your home, they won't pay.

 

If you only need to do it short term, tell your lender, they will probably be really cool about it.

I agree. Even an accidental-damage on property insurance (e.g. storm damage) would be rejected on grounds of breach. Insurance contracts are uberrimae fidei, i.e. 'of the utmost good faith' on the part of the property-owner. Similarlly, the mortgagee could use the impermissible letting as grounds to demand immediate full repayment (with the threat of repossession). Yes, the mortgagee might insist on switching the account to a BTL one at an increased interest rate; but even that's better than repossession and CCJ!

But do you have to declare this to your lender, could you just rent out your property and not even declare it, surely they would not even know.?

This could land you in a whole heap of trouble.

1) In the conditions of a residential mortgage it states that you cannot rent the property out or sub let. Breach of this ruling will be a breach of the mortgage contract, this has the same effect if you failed to keep up payments of the mortgage and could lead to reposession.

2) The insurance held on the property would be null and void as insurance companies generally have a 30 day rule IE they need to know if you are not in the property for longer than 30 consecutive days, therefore if the tennant burns the house down, no insurance.

3) If you bought a property on residential basis with no intention to live there immediatly renting the property out, due to the more appealing terms offered by lenders for residential mortgages, the lender could deem that you obtained the monies by deception and thus criminal proceedings could take place.

Lenders have a whole raft of ways of finding out if you have rented a property out from the obvious ones such as returned post stating not known at this address right through to electronic data checks with utilities and phone companies.

Not only these but moving forward if you were found in breach of the terms and conditions then it is unlikley that you will obtain mortgage finance in the future.

For the above reasons I could never recommend this course of action no matter how appealing it could look.

If you want to know the best BTL rates, drop me a PM

Also, the above assumes that it is a house that you're letting.

If it's a flat, on the other hand, you'd also have to read carefully the small-print of the lease. That might prohibit or restrict sub-letting.