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Question about renting out my mortgaged property


shaznay

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I'm thinking of renting out my mortgaged property

 

I own about 40% of the property

 

will I have to change my mortgage to a buy to let

or can I just get their permission to rent

 

I really dont want to start messing about changing mortgages I am still in a fixed rate till end of 2014

so it is going to rather costly to do that

 

I am with Halifax at the moment

 

I dont have any experience so any advise would be appreciated

thanks

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Go and talk to your mortgage provider and your insurer about what is possible and impossible. You don't really stand a chance of getting better advice on here as only your mortgage provider can tell you what is acceptable to them and you will need to change your insurance policy too.

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Yes, that is absolutely correct - only your mortgage company can advise you on this matter. However, think very carefully before renting out - there are many things to consider, some of them expensive. Just a few of these:

 

Insurance - buildings only if unfurnished, include contents if furnished.

Gas safety certificate (annual)

Agency fees if used

Risk of damage to property

Repairs to property and being on call to your tenants

Tax self assessment - if you are not experienced in this you would need to pay an accountant annually to complete the tax return. There is a heavy fine if this is not done.

Edited by ccit
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thanks

I will give them a ring tomorrow

 

I have a feeling its not going to be easy but I dont want to sell in this climate and I am now buying a property with my partner

so obviously the rental income will pay the mortgage on the flat

Edited by shaznay
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Have a look at my rant on another thread. Think carefully before you get in to renting this place out. Location is important as to who you might attract and how they may disrespect your property. I guess you will have nice furnishings in there and you will need a really good agent who can attract a good clientele. In the end it may not be worth all the trouble you need to go to considering fees and maintenance issues. The rental will pay the mortgage on the flat, are you sure? Explore things really well before deciding to rent or sell you may be better off with money in the bank.

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On the face of it, I can see your reasoning behind renting rather than selling. However, you have a decent bit of equity in it so if you could get it sold and the money in your pocket you could use it to reduce your mortgage on the new property. That would be good as it would save you a lot of money in the long run. So yes, think carefully about your options and most of all enjoy your new home and your new life.

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to my knowledge you will have to convert it to a let to buy and as you have a mortgage for 60% still it may impact the amount of mortgage you are able to get your second home. It's not straight forward and of course its all dependent on individual circumstances, but a good mortgage broker will be able to guide you through.

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I have just spoken to Halifax

 

they have given me permission to rent the flat

I can stay on my current rate till the end of the term (nov 14) I will then have to reapply, he said there shouldnt be a problem when the time comes, there are no extra costs involved

just got to get lanlords insurance

going to get a letting agent in now to give me some more advise

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Some letting agencies are okay, others promise the earth but deliver nothing and leave your property vacant for months. Beware of the commission charges and hidden costs (tenancy renewals, inspections, referencing, etc), and be aware that VAT will also be added to the costs/commissions charged to you (many agents forget to tell you this). Most accept no responsibility if they let your property to a bad tenant, and this could seriously put your property at risk. I'm not saying don't use an agent, just be extremely careful and go into it with your eyes wide open and fully informed and prepared.

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