House and a UK mortgage

**mr luvpants** · 19-02-2009, 03:21 PM

We are looking to go next year and we have to change our mortgage this September. I have just telephoned our mortgage company and they were most helpful (not!).

If you are having to leave your house and rent it out as we are thinking of doing, what did you do regarding mortgage products etc. We were thinking of changing to an interest only mortgage but the mortgage company is saying that they want proof that you have investments in place to repay the loan if needed in the future when the term finishes.

JOHN

**Cane Family** · 19-02-2009, 03:43 PM

Originally Posted by mr luvpants

We are looking to go next year and we have to change our mortgage this September. I have just telephoned our mortgage company and they were most helpful (not!).

If you are having to leave your house and rent it out as we are thinking of doing, what did you do regarding mortgage products etc. We were thinking of changing to an interest only mortgage but the mortgage company is saying that they want proof that you have investments in place to repay the loan if needed in the future when the term finishes.

JOHN

Hi John, Mr Bar Steward here LOL

When i spoke to our mortgage company and they asked how did I intend to pay the mortgage off, I said when I sell it, I even put that on the forms I had to fill out to change to interest only and pay them some money. Now unless you are in negative equity not sure what you say then....

Just get the forms from them, fill them in and job done.

Regards
Steve

**mr luvpants** · 19-02-2009, 03:49 PM

Thanks mr bar steward!

No we are not in Neg equity. Did you have to pay a higher interest rate because you were renting it out? Also did you have to pay a new product charge?

JOHN

PS Hope you did not take offence regarding my post on your visa? None meant mate!!!

**Cane Family** · 19-02-2009, 03:53 PM

Originally Posted by mr luvpants

Thanks mr bar steward!

No we are not in Neg equity. Did you have to pay a higher interest rate because you were renting it out? Also did you have to pay a new product charge?

JOHN

PS Hope you did not take offence regarding my post on your visa? None meant mate!!!

No no offence taking.

With regards to interest rates, on our flat we have, we do rent it out, we have got a tracker on that one currently 1% + 1.99% so quite good

With our house we still live in, we may end up renting that also if we cant sell it and have to go to Oz if I get a job. This one we have a fixed rate till August this year, but we are hoping to sell it before we go. If not may just leave it empty until sold.

Regards
Steve (Head barman)

**Cane Family** · 19-02-2009, 03:55 PM

What they will do with their permission is allow you to rent it out without a product change, but not sure if i have heard anyone who has done that, but they may also say you would have to swap it for a Buy to Let mortgage oin of course thats not free.

**leeob77** · 19-02-2009, 03:58 PM

we told our mortgage company we were thinking of renting the house out. they told us to switch to an interest only mortgage. there would also be a one off charge of £99 for them to allow us to rent it out. no product charge etc. dont know what the interest rate was but mortgage went from £480 on repayment to £275 on interest only.
we are with Alliance and Leicester.
decided not to rent in the end. its going on the market next week.

good luck.

lee.

**Girly** · 19-02-2009, 04:17 PM

Hi all

Sorry about this, I'm probably missing something really obvious here, but why would the mortgage company want you to change to interest only?? Surely their only concern is that the monthly payment is covered? If your potential rental income is sufficient for the repayment mortgage you're on, what's the difference to mortgage co?

Again, sorry if I'm missing something on this, but I'll probably/hopefully be in the same boat in 6-9 months so I want to understand!!!

Thanks Ellie :)

**Cane Family** · 19-02-2009, 04:24 PM

Originally Posted by Girly

Hi all

Sorry about this, I'm probably missing something really obvious here, but why would the mortgage company want you to change to interest only?? Surely their only concern is that the monthly payment is covered? If your potential rental income is sufficient for the repayment mortgage you're on, what's the difference to mortgage co?

Again, sorry if I'm missing something on this, but I'll probably/hopefully be in the same boat in 6-9 months so I want to understand!!!

Thanks Ellie :)

I dont think the mortgage company want them to change, it saves you money if you are happy to just pay off the interest with no money coming of the captial. Your mortgage is for you living there and not meant to be rented out, maybe another money making scheme by the banks, but what they dont know cant hurt them, indeed as long as the money is paid to them why should they care or even know.

Regards

**whitleybairn** · 19-02-2009, 04:41 PM

Originally Posted by Girly

Hi all

Sorry about this, I'm probably missing something really obvious here, but why would the mortgage company want you to change to interest only?? Surely their only concern is that the monthly payment is covered? If your potential rental income is sufficient for the repayment mortgage you're on, what's the difference to mortgage co?

Again, sorry if I'm missing something on this, but I'll probably/hopefully be in the same boat in 6-9 months so I want to understand!!!

Thanks Ellie :)

Property is one of the safest investments you can make, so in 5-10 years time your house will be worth more than it is now and you will, eventually, want to liquidate your assets in the UK. Property trends are always upwards over time, except blips during recessions (but these are always temporary), so the banks don't really care as long you can service the interest monthly and you can cover the capital at the end of the mortgage or when you sell. If you can't the bank will take your house off you and sell it to get their capital back. Whichever way, the only winner is the bank.
Regards,
Scott.

**TheBrammies** · 19-02-2009, 05:01 PM

be careful when renting out your property,by the book you should tell your mortgage provider and change your buildings insurance the mortgage rate is higher on a buy to let because the risk is higher(higher default rate)your buildings insurance doesnt cover tenants and is void.but if you were to let them house sit your property this is different i believe and don't have them pay you from there bank to your bank direct has this can be traced by your mortgage provider the last thing you want is them calling in the loan.
Of course they want your to have a new product thats at least £999 fee for the privilege for letting you keep the mortgage you already have at an higher rate
hope this helps