Kensington Mortgages HELP!!!

[troubledsoul]

Really need advice!!! I was made bankrupt around 2 years ago, at that time my arrears with Kensington mortgages was around £8000. Due to financial difficulties I had to rent my home out to pay the mortgage which I informed Kensington Mortgages. They told me because of this they would have to treat the mortgage as a buy to let mortgage and increased the repayments from around £600 to over £900 per month on a mortgage of £122000 over 25years. As I am in no way able to charge that in rent, I have since moved back into my home and asked them to revert the mortgage back to what it was before whilst renting out a room to a lodger. I have not been able to pay back any of the arrears, but have been making regular payments of over £600 per month for a year and a half. The payments I am making do not meet the sums they are requesting and therefore every couple of months would receive solicitors letters etc.....My question is can Kensington change my mortgage to buy to let mortgage in the first instance? Any advice would be much appreciated, as this problem is draining my soul!!!

[ukaviator]

Hi

 

Welcome to the site. Kensington should have offered you an interest only solution for the problems you got into, Changing the Mortgage to a Buy to Let enabled them to charge about 6% on that type of Mortgage. The other thing is renting out your house puts you in the position of a tax liabily as well. Any income on renting out the property would be classed as a Residential Letting.

 

When you get into Mortgage arrears the mortgage companies, Kensington are notorious for this, charge you £50 a month arrears fee. This is added to your account automatically. You should claim this back with interest. To do this you need to get a Subject Access Request. This is a request under the data protection act to get all of the information the Kensington hold on you. There is a £10 fee, and the letter template is here:

 

http://www.consumeractiongroup.co.uk/forum/content.php?417-A-Subject-Access-Request-for

 

Also for your information, the Kensington were fined for failing to look after their mortgage arrears customers, full report here:

 

http://www.fsa.gov.uk/library/communication/pr/2010/065.shtml

 

http://www.guardian.co.uk/money/2010/apr/12/fsa-kensington-mortgages-fine

 

When you get the spreadsheets back with the charges on them, add them up and ask fopr the charges back. Regarding the mortgage change I would make a complaint to the Kensington and if you get nowhere there complain to the Financial Ombudsman.

[Lea_HTH]

To answer your question: yes, they are able to change the interest rate on the mortgage when you let the property out. This is to reflect the additional risk in buy to let properties. Now that you have moved back in, the interest rate should be returned to a residential one.

 

You must start making some payment towards the arrears as not doing so will lead to a likely possession claim.