I am currently letting my flat to tennants. They have now expressed an interest in purchasing. However, I never informed the mortgage company that I would be letting the property out (I fell into money troubles because of a lost of job.) What are the reprecussions if I was to sell to them and what would be the best way to manage this (and the mortgage company?) Thanks.
2006-11-28 00:54:05 · 10 answers · asked by Viv T 2 in Business & Finance ➔ Renting & Real Estate
Say they were staying with you as guests xx
2006-11-28 00:55:58 · answer #1 · answered by Anonymous · 0⤊ 1⤋
There's no need to worry. They wouldn't be best pleased with you if you took out the mortgage in order to start a commercial concern. All they really want however is their money back with as much interest as possible.
This is a grey area: you have a right to use your property as you like, they don't have a right to any business you operate from home e.g. nobody who uses space in their house for work (office/storage etc) even thinks of giving a separate cut from the mortgage over to the bank, but taking out a mortgage to start a business isn't really allowed though many of us do it.
If you are nervous about repercussions USE A DIFFERENT BANK OR MORTGAGE COMPANY TO SELL! your bank doesn't need to know anything about the process until you hand them the money.
You already have the people you want to sell to, get your survayor let them get their survayor (I would ask top price) and then see about swopping documents and setting a completion date.
selling up property isn't always a good idea unless you can get more property, or unless you have no other choice. I have been in your situation and survived without paying any large fines, this (the above) is what I did.
all the best!
2006-11-28 01:57:29 · answer #2 · answered by Can I Be Your Pet? 6 · 0⤊ 0⤋
I can assure you that the mortgage holder does not care how the payments are made so long as they are made on time and using money obtained from legal means (in the U.S. the dept of justice can cease assets acquired with drug money).
If you want to sell to the tenants, you can do an outright sale and the proceeds would be used to pay off the mortgage and transaction costs & you would keep whatever is left over as profit. In the alternative, you can do a lease with an option to buy excercisable by the tenant at a certain period. You would need to agree with the tenant how much, if any, of the rent goes towards their deposit/down payment. Those funds would then need to be escrowed in a non interest bearing account and held for the benefit of the tenant when they are ready to do their loan financing.
2006-11-28 04:33:22 · answer #3 · answered by boston857 5 · 0⤊ 0⤋
If they are buying it from you (Paying Cash or Borrowing their own funds) Then you should not have any problems.
(I have sold property that way before to tenants)
However if you are considering a Contract for deed then that may be another issue and you may want to get professional advice. As All states have some different laws and some mortgage Co's may be more lenient than others. Depending on the situation
2006-11-28 01:52:35 · answer #4 · answered by Lucky 4 · 0⤊ 0⤋
If you sell to your tenants, then there probably wont be any repercussions, as your mortgage company will be repaid on the sale and the matter closed.
Had it found out earlier then it could have foreclosed, and / or increased the interest rate.
2006-11-28 01:06:56 · answer #5 · answered by johnk1964 2 · 0⤊ 0⤋
I wouldn't worry. You don't even have to tell them you are selling to your tenant. Just have your tenant line up his mortgage or come up with cash and at the closing, pay off your mortgage.
2006-11-28 01:27:28 · answer #6 · answered by spot 5 · 0⤊ 0⤋
I dont know the position legally, but your mortgage company does not know to whom you are selling your flat whether youre living their personally or not. Your lawyer will automatically pay off your mortgage when you sell, but they dont have to know to whom you are selling. I cant see why you need to tell them at all.
2006-11-28 01:05:51 · answer #7 · answered by Helen C 4 · 0⤊ 0⤋
No problem with the bank / building society.
Potential capital gains liability if you have rented the property for more than three years.
2006-11-28 07:17:30 · answer #8 · answered by Heyjude 2 · 0⤊ 0⤋
speak to a finacial advisor to see where you stand. or citizens advice bureau.....
im afriad i dont know enough about the law to even know if its considered fraud or not
2006-11-28 01:11:33 · answer #9 · answered by Anonymous · 0⤊ 0⤋
It could be considered fraud.
2006-11-28 01:02:46 · answer #10 · answered by Alterfemego 7 · 0⤊ 0⤋