Northern Rock Consent to let
Discussion
I'm thinking about buying a new house and letting my flat out. My mortgage is with Northern Rock. They're sending me a 'Consent To Let' application, which I have to send back (with the obligatory fee, of course) and they'll either approve or reject it.
Has anyone ever done this before? Does anyone know what their criteria for acceptance/rejection is?
Cheers
Has anyone ever done this before? Does anyone know what their criteria for acceptance/rejection is?
Cheers
A mortgage company will only want to know 2 things
1) Will it affect your ability to pay? (of minor concern unless your circumstances have changed)
2) Can they get rid of the tenants if they need to reposess your house?
It's (2) that is of most concern to them (and therefore you). They'll want to see an Assured Shorthold Tenancy Agreement which will give you rights to throw your tenants out if your house is being reposessed. They don't want you to have sitting tenants that can't be evicted and thus prevent them from reposessing.
That's about it really. The fee is just an excuse to shaft you some more - there isn't really much extra work for them other than assessing your tenants Agreement.
>> Edited by JonRB on Wednesday 12th October 18:08
1) Will it affect your ability to pay? (of minor concern unless your circumstances have changed)
2) Can they get rid of the tenants if they need to reposess your house?
It's (2) that is of most concern to them (and therefore you). They'll want to see an Assured Shorthold Tenancy Agreement which will give you rights to throw your tenants out if your house is being reposessed. They don't want you to have sitting tenants that can't be evicted and thus prevent them from reposessing.
That's about it really. The fee is just an excuse to shaft you some more - there isn't really much extra work for them other than assessing your tenants Agreement.
>> Edited by JonRB on Wednesday 12th October 18:08
If you're renting the whole place out you'll need a proper BTL comercial mortgage, they run at about 1% more than a domestic one
even if your current mortgage company are OK with you doing this I suspect you'll find it hard getting another mortgage without changing this ones type
If that made any sense
>> edited to say, did you tell them that you were going to buy somewhere else, or did you just ask whther you could rent the current place out ?
Like I said, you can only have one domestic mortgage
>> Edited by Incorrigible on Wednesday 12th October 18:27
even if your current mortgage company are OK with you doing this I suspect you'll find it hard getting another mortgage without changing this ones type
If that made any sense
>> edited to say, did you tell them that you were going to buy somewhere else, or did you just ask whther you could rent the current place out ?
Like I said, you can only have one domestic mortgage
>> Edited by Incorrigible on Wednesday 12th October 18:27
Not necessarily, Ben. Many mortgage lenders are happy for you to rent out on an ordinary mortgage provided they give permission. It's just that in many instances it doesn't make sense for the landlord to do it for long, as it makes it hard from them to get an additional traditional mortgage, so in the long term it is better to remortgage with a Buy-To-Let mortgage (easy to get if you have tenants in already) and then get a traditional mortgage for your main house. However, in the short term it is a solution.
Edit: Just seen your edit. Not strictly true. You can have more than one tradtional mortgage, but they won't lend anything more than they would for one. So if, for example, you had a borrowing capacity of £250k and you had a £120k mortgage already, the most they'd lend you on a second would be £130k (which is about as much use as an aqualung on a donkey).
>> Edited by JonRB on Wednesday 12th October 18:35
Edit: Just seen your edit. Not strictly true. You can have more than one tradtional mortgage, but they won't lend anything more than they would for one. So if, for example, you had a borrowing capacity of £250k and you had a £120k mortgage already, the most they'd lend you on a second would be £130k (which is about as much use as an aqualung on a donkey).
>> Edited by JonRB on Wednesday 12th October 18:35
just quickly, what inc. is on about is let-to-buy rather than BTL and is how many amateur property empires are built...also, the way to get round this when it comes to remortgage time is to switch back to residential and then pick up the consent to let form from NR again..I know it incurs another fee but work it out against the higher interest rate and fees of their BTL products...
PS NR only want to know if the rent will cover the mortgage at 6% flat on interest only.
PPS I used to work for them in this respect, and I currently deal with them daily - any questions you have I am happy for you to mail them to me
>> Edited by minimax on Wednesday 12th October 19:03
PS NR only want to know if the rent will cover the mortgage at 6% flat on interest only.
PPS I used to work for them in this respect, and I currently deal with them daily - any questions you have I am happy for you to mail them to me
>> Edited by minimax on Wednesday 12th October 19:03
minimax said:
just quickly, what inc. is on about is let-to-buy rather than BTL and is how many amateur property empires are built...also, the way to get round this when it comes to remortgage time is to switch back to residential and then pick up the consent to let form from NR again..I know it incurs another fee but work it out against the higher interest rate and fees of their BTL products...
PS NR only want to know if the rent will cover the mortgage at 6% flat on interest only.
PPS I used to work for them in this respect, and I currently deal with them daily - any questions you have I am happy for you to mail them to me
>> Edited by minimax on Wednesday 12th October 19:03
Still in the office chum?
Yep, Northern Rock only need the rent to cover the interest portion of your monthly payments... regardless of wether its I/O or repayment.
Cheers
Dave
jimothy said:Yes
I'm thinking about buying a new house and letting my flat out. My mortgage is with Northern Rock. ...Has anyone ever done this before?
jimothy said:No, but it was fairly painless - the mortgage was transfered to a different NR department (commercial or something like that) who seemed to understand the process well.
Does anyone know what their criteria for acceptance/rejection is?
Different (slightly higher) mortgage rate, as I lost my 5-year fix through changing
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