Hi.
I've found myself in a bit of a situation. If anyone could offer any advice I'd really appreciate it. Thanks.
I've recently taken out a mortgage with my (then) girlfriend. 6 weeks in and she's decided to split up with me and move out. I'm now left at the beginning of a long mortgage. I can probably just about make the payments myself, but it doesn't seem cost effective to spend £1000/ month plus bills on my living.
I'm thinking about letting the place and renting in a house share elsewhere. The mortgage and service charge on my place is just under £1000 on a repayment mortgage, and in rental I could expect to collect £900/month.
If I factor in paying a letting agent to look after things for me as well (12%, ~100/month) I'll prolly lose about £200/month on the flat, although even factoring this in I'll still be about £500/month better off than staying in the place on my own.
I'm on an excellent mortgage rate 4.5%, but my mortgage lender are only currenly offering a product on 5.99%. I'm worried about telling them I'm thinking of letting incase they want to change my product as this will work out expensive. It just says that I need to speak to them if I want to let but doesn't mention if there will be costs or not. I understand that it's important to tell my building insurance people, although they're with a subsidary of the lender as it happens. I don't know if they'd pass info to the lender.
What are the disadvantages of not telling my lender? What are the disadvantages of not telling my insurer? If I tell my insurer are they likely to notify the lender? What reasons could I give to the lender which may make them less likely to want to charge me? Would you recommend going through a managed service with a letting agent, or doing the letting myself? I was thinking of going with the agent for 6 months to get to know the process at least.
Also, although my girlfriend has said that as far as she's concerned the place is mine (I paid for everything except her share of the rent for two months), however, she's still on the deed and the mortgage. If I take her off properly it'll be about £500 in legal costs, plus £165 in taking her off the mortgage, plus having to refinance her half (at the new expensive rate). I think I'm going to leave her name on and get an agreement written up between us. Then I'll take her name off when I remortgage. Again, does anyone see any problems with this? Would I still have to pay the legal costs if I wait until I remortgage? What about if I wait until I move?
Thanks loads for any help.
W