Mortgages... good times

RoyMi6

RoyMi6

RoyMi6

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Joined
9 Mar 2010
Posts
2,893
Howday ho folks,

Looking for a little help digging up some T&Cs and the specifics.

Just been into the Halifax and they've told me that if I was to live in a house that I've bought, and had their mortgage, that it would be against their terms and conditions for me to have a room mate that pays me rent.

This is after I've made it clear that I can easily make the payments on my own and and have mortgage promise in hand.

She tried to explain it to me but ultimately I left not quite understanding why this is the case as she was apparently starting to get angry at my questioning of the matter.

She finished the matter by saying that the situation I was describing wouldn't be considered as buying for personal accommodation or buy to let and as such I wouldn't be possible. If I was to take their mortgage and had a tenant they "would be forced to report me to Inland Revenue".

First of all I'm having difficulty finding the terms and conditions in full anywhere on the Halifax website, nor can I find any mention of this on their website. Someone able to point me in the right direction?

Also, the thing that's got me most confused is that if it was against their terms and conditions why would they report me to inland revenue?! Surely the "rent a room scheme"(http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804) applies here and as long as I receive less than £4,250 (or more but declare it) they'd have no issue. Again, I can't find any supporting information on the DirectGov website that states you can't rent a room if you still have a mortgage on a house.

Basically, anyone had any experience with this?

(Bah, this turned into a bit of a rant but just trying to give you all the details)

Cheers,
Roy
 
It would be classed as sub-letting, or something equally crap.

If they're kicking up this much fuss go elsewhere and see what other lenders say.
 
Just tell them you have changed your mind and that actually you wont bother letting the room afterwards.

You should never have mentioned it as this is virtually always against standard product T&C's.
 
Emails received from both.

Halk - The problem I'm really having is even trying to FIND the T&C's to see where this is stated. As you've said in your email I can't see the problem if I'm staying in the house and simply having a friend live with me.

Triggerhat, I'll let you know what I come up with :)

EVH, even if it is sub-letting surely that's my progative and my decision what to do with my house?

Don't worry, won't be going with them ;)

Roy
 
Jez said:
Just tell them you have changed your mind and that actually you wont bother letting the room afterwards.

You should never have mentioned it as this is virtually always against standard product T&C's.
Click to expand...

This. Only tell them what you need to get the mortgage.
 
Isn't there some sort of resurgance of having 'lodgers' and depending on how you classify the arrangement a normal mortgage is fine?
 
Thought I'd update you kind folks with my progress so far.

Turns out that not having lodgers on a mortgage IS a good idea for banks and there's a pretty simple reason for it. Just wish someone has told me rather than just saying "because".

Anyway, the reason is that if you have a lodger and you default on your mortgage (stop paying) and you move out of the house but your lodger stays then the bank can find it very hard to remove your lodger. They effectively have "squatters rights" and although it is possible to remove them, as you can see from articles all over the net (http://www.landlordzone.co.uk/squatters.htm), it's not the easiest thing to do in the world.

So where does this put me now? Well, some lenders do allow lodgers so I'll basically be following that route - yay!

Roy
 
Some people are just to honest.

Lie, don't tell them you have a lodger and have done with it.
 
I bought a house with my GF and my mortgage lender Britannia were fine with my mate living with me for a while.

They gave me a form i had to get him to sign. Basically saying he had no rights to the house and he could be kicked out etc. This was a Britannia form i just had to get him to sign.

Never had any problems with them in that regard. Maybe look at a different mortgage lender.
 
I've got a friend who pretty much does this with 1 of the rooms in her flat.

As far as I can tell, shes invalidating the terms of her mortgage by sub-letting, as there's a "no sub-letting" clause.

This in turn would surely invalidate the house insurance, as there wont be a tenant specified in the occupants section I'd doubt.

Trouble is, if your tenant empties your house of contents, or causes some issue that the insurance have to pay up for then you're probably knackered. With the mortgage its' less of an immediate issues, but as said some are more flexible than others.

Best way to do it if you want to avoid the buy-to-let is to see if you can do something like CraigN mentioned, with a form that will nullify squatters rights, but still lets you let a room out.
 
If you're doing everything by the book, don't forget you need to tell your local council also as your council tax will go up (no longer single occupancy)
 
It's a tricky one, it's not subletting though, this is when you rent a flat but rent it out to someone else.

In all fairness, and flame away, but you should probably just not say anything on the matter. It's not your right though as you don't own the house, the mortgage company do.

It goes on all the time so I wouldn't worry about it.
 
Yeah, there seems to be plenty people out there advising that "just don't tell the banks" is the route to take. Not just on here but other forums, friends of the family and mortgage brokers.

Regardless of what anyone decides to do the council should always be informed. If the banks find out (which is unlikely) then so be it, but don't go shouting it from the rooftops :)

I'm currently looking to keep everything above board because that's the kind of guy I am. There's plenty of building societies out there willing to do business with people in my situation so it's not going to be a problem.

Saying that it's all kind of irrelevant for me at this exact moment in time. I'm slowly finding this all out but for anyone that's interested I've found that there's a couple of major steps I'm working through and best way to do it is:

1) Get a mortgage promise from any bank. Get into your bank and see you a mortgage advisor. They'll give you the latest info on mortgages at the moment but also get you a "Mortgage Promise" that will say "We can lend you up to £200,000" for example. You'll also get a good idea of what sort of monthly repayments you'll be looking at. So for example you might not want to borrow £200,000 because you will have to pay back £1000 a month. So maybe only borrowing £150,000 would be more within your budget.

2) Go see houses. The reason you don't want to do this as step one is that you might go see a house you really want only to figure out you can't get a mortgage at all, let alone the price of the house you like :)

3) Get in touch with you solicitor and start making offers on the house you like and looking at mortgage offers. You only want to really start looking in depth at mortgage offers once you've found a house. Finding a house can take months and mortgage offers change daily.

Anyway, I'm at step 2 - going to see some houses this week. Hopefully my next thread will be something along the lines of "OMGWTFBBQ!! I JUST GOTZ A HOUSE!!" :D
 
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