What happens to your mortgage if you decide to let your house out for several years while you work abroad? This is the question that Darren tackles Polson in the ASK The Expert function of this week
The question
My husband and I have a house with four bedrooms in which we currently live with our two children. From August we will move to Singapore for two years and during this time we will rent out our house to tenants. The rental market is strong in our area, and we are convinced that we get a good price and no gaps.
However, we need some advice about our mortgage. Should we adhere to our current residential mortgage, or do we have to switch to another product because we are now landlords? We are in one for two years Five -year -old deal We are therefore struck by early repayment costs if we switch to a buy-to-fit mortgage. What do people usually do in this situation?
Darren’s answer
Exciting times for you with your move to Singapore!
Two main options are available:
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Transfer your current mortgage to a permission to rent (CTL) product
This means that your current lender effectively gives you permission to rent out your property. In most cases, the property must be rented using an acceptable lease, such as an insured Shorthold rental.
The challenge Given your circumstances is that many lenders only allow permission to leave a maximum of 12 months. You must also inform your building and content insurer, because this can change the coverage.
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Remortage to a Buy-to-Let (BTL) product
Based on your mortgage until 2026, you must check the applicable repayment costs, but this is perhaps the only option for the two -year period.
There are many factors of this, because you do not have a residential property in the background or have previously been a landlord, who limit the available lenders. Moreover, the application process is different for buy-to-let And the way in which money lenders assess cases varies.
Keep in mind that many lenders use the rental yields from the property to determine the maximum amount affordably, and often this does not take your salary or personal expenses into account.
Both the options I have outlined above are subject to the criteria of the lender and based on your circumstances.
It is worth speaking with a mortgage broker who specializes in buy-to-long mortgages, they help you by guiding the process.
Copyright David Johnstone Photography
Meet our expert …
Darren Polson is head of mortgage operations Aberdein Considine. He has been writing a normal column for which mortgage for more than two years and is now here to answer your questions.
If you have a question for Darren, e -mail then [email protected] Or leave a message in the comments below.