Video: What Happens If I Let My Property And Don't Tell The Lender? - Estate Agents in Derby

In this week’s video, Oliver and Joe talk about your options if you want to let the property that you currently live in and the potential consequences of not informing your lender. You can watch the video above or read below for the full transcript…

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Oliver: Hi guys, in this week’s video we’re going to be talking about the options you’ve got if you’re looking to rent or let the property you currently live in.

Intro...

Oliver: Hi, I’m Oliver from Hannells, I’m here with one of our expert in-house mortgage advisers Joe. Today we’re going to be discussing your options if you’re looking to rent the property out that you currently live in. OK, so Joe I currently own a property, I’m looking to move out and want to rent it out what do I do next?

Joe: OK yes, so there’s a couple of options that we’re doing. Let’s talk about what’s called a “let to buy” mortgage. It’s where you remortgage the current house you own and live in to a “buy to let.” The reason it’s called a “let to buy” is you’re letting it out to enable you to buy onwards. What you’ll do, is you’ll make a remortgage application for that property to go to a buy to let and then you’ll make an application for a residential mortgage moving forward.

What happens is both mortgages will complete at the same time. You’ll have a tenant move into your house and then you’ll move into the new residential house that you’ve just purchased.

Oliver: OK got it, so what if I’m looking to rent out my current property but I’m not buying onwards – possibly moving in with a partner or moving in with family – what are my options then?

Joe: Options for that sort of scenario is called a “consent to let.” That’s where you call up your current mortgage lender and say “Look I’m moving in with my partner and I’m moving to a different location for work” and you want to be able to rent that property out.

You may be in a fixed rate, you might have penalties for remortgaging so you don’t necessarily want to go down the buy to let route. You might not have enough equity in the property.

What the mortgage lender will do is grant you sort of permission to let that property out to someone whilst you’re not able to live in the property.

Oliver: OK, so there might be some people out there thinking “well I want to rent my property out but I’m not going to tell my mortgage company” is that a good idea?

Joe: No, that’s not a good idea. If you don’t tell the mortgage lender and they find out, there could be additional interest to pay, there could be penalties – financial penalties – they could ask you to pay the mortgage in full straight away. Worst case scenario, they could even repossess the property. So make sure if you are thinking of going down that route that you inform the mortgage lender.

Oliver: OK, so that clarifies that – not a good idea. If you’re looking to transfer your mortgage into either a buy to let or consent to let mortgage feel free to get in touch with Hannells.

We’ve got Joe here and any of our other in-house mortgage experts.

You can get in touch with us through hannells.co.uk, leave a comment below or send us a message. Thank you for joining us today Joe it’s been really helpful, thank you for watching and we’ll see in the next one!

If you have any questions or concerns about mortgages or property, or maybe you’ve got a suggestion for a topic you’d like us to cover in a future episode, please get in touch with us at Hannells at enquiries@hannells.co.uk.

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