Lenders Targeting Landlords With Residential Mortgages

Wednesday, November 6, 2013
Lenders Targeting Landlords With Residential Mortgages

Lenders Use Social Media To Target Landlords With Residential Mortgages

Mortgage Lenders Use Internet To Identify
Residential Mortgaged Properties Advertised For Rent

UK Banks and mortgage lenders are starting to identify reluctant, accidental and first time landlords who let out properties without asking for the correct permissions.

According to newspaper reports, UK banks and mortgage lenders are sifting through the electoral register, social media websites and online letting agencies looking for evidence that properties on their books that are on residential mortgages are being offered for rent by landlords who may not be aware of the regulations.

Residential property owners who have moved home and wish to rent out their previous main residence should ask their lender for “consent to let” allowing them to rent out the property with permission of the lender.

This approach could add an administration fee or attract a higher interest rate on their mortgage loan. The alternative is to switch to a buy-to-let mortgage.Buy-To-Let mortgages are offered at slightly higher rates because many lenders view rental properties as a much higher risk, this is because of the possibility of tenants circumstances changing and accruing rent arrears and accounts for void periods when the property is not occupied.

Lenders Suspicious Of Residential Property Owners

Some mortgage lenders have become even more suspicious over residential property owners who have moved on without selling property and they are concerned that vast numbers of UK property owners have kept quiet about their accommodation arrangements in an attempt to avoid the extra costs that may be incurred by switching their mortgage or seeking permission to let.

Many independant brokers have been warning landlords for months that many UK based mortgage lenders and banks are being more pro-active about checking up on the occupants of properties on residential mortgages.

Renting out property without the correct permissions breaks the terms and conditions of most residential mortgages, and reluctant, accidental and first time landlords need to be aware of the legal obligation they have to disclose what the property that is mortgaged is being used for.

The worst case scenario for property owners who are caught renting out their previous main residence without permission from their mortgage lender could see the lender recalling the full value of the mortgage loan immediately.

Buy-To-Let mortgages tend to examine the potential profits that can be produced from rentals usually as a multiple of the monthly rental price up to 125% instead of the property owners employed income.

If you own property that you are renting out without the knowledge or permission of the lender, then you are risking a great deal unnecessarily, switch to a Buy-To-Let mortgage NOW!

Finance4Landlords.com have a team of Buy-to-Let mortgage advisors will search the whole of market to ensure that you have a product specific to your needs and requirements.

This was written by Mike Clarke. Posted on at 11:30 am. Filed under Buy To Let, Landlord News. Tagged , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , . Bookmark the permalink. Follow comments here with the RSS feed. Both comments and trackbacks are currently closed.