Are you looking to build a rental portfolio, starting with your current home? Are you looking to travel for a period of time and want to rent out your property in the meantime? The issue here is that your regular mortgage may not allow for you to rent out the property, the typical mortgage for this would be the buy to let mortgage.
So do you have any options?
Yes in short, but it does depend on how you want to rent out your property. A short-term lease of less than a year might be possible depending on your mortgage lender, but we can come to that in a bit.
Your first step is to speak to your mortgage provider and explain what you want to do with the property. Failure to do this could constitute mortgage fraud, which could end badly in some cases.
If your goal is to lease your property full time then you will need to switch to a Buy to Let mortgage as previously stated, this could be with your current provider, but, your best bet would be to speak to a mortgage advisor to find you the best deal.
If your goal is to lease the property short term then you may be granted consent to let. Consent to let is a concession from the lender to allow you to put the property up for lease for an agreed period of time.
1
Equity
Refers to how much of your property you own outright (in other words, how much cash would go back into your pocket rather than your lender’s if you sold your home and paid the mortgage off). Some lenders will only give you consent to let if you’ve built up a decent amount of equity, such as 25% of your house’s value.
2
Income
Some lenders won’t give you consent to let unless you’re earning above a certain amount. They’ll also want to make sure that the rental income you get on your property will easily cover the cost of the mortgage repayments.
3
How long you’ve been with your lender
Some lenders will only give you consent to let when you’ve been on your current mortgage deal for a while. Some will want you to have been with them for at least 12 months.
4
Help to buy
On a Help to Buy or shared ownership mortgage? You can ask the schemes for consent to let, but they have pretty strict criteria. So, it’ll make things that little bit harder.
Not sure you’ll meet the criteria for consent to let? Don’t panic just yet. You might still be able to rent out your house – it just means you’ll need to switch to a buy-to-let mortgage, so come and speak to us and we can help you.
