main residence question

alan_blue

here is a question for you, we are moving out to oz in june next year , renting the house out and need to remortgage our house in the uk before we go. I want to keep on a residential mortgage and benefit from the lower rates of course.

My brother lives abroad and has managed to be lucky and acheieve this for the past 4 years without being questioned somehow.

The question is does anyone have any insights on how to do this officially or by other means?

My plan is to say that we want to keep it as our main residence as we plan to return in a couple years?

thanks in advance

_Andy_

If you stick with your current lender you can ask for consent to let which means they'll keep the residential rates if they're happy with the proposal.

Alternatively you seem to be implying you'd be happy with mortgage fraud ("or by other means") which is dissapointing.

alan_blue

its not mortgage fraud at all, by letting them know and if you are returning within your fixed term i believe.

we do have consent to let with exsisting lender but want to remort.

Im asking the questions so that I can do it correctly so please dont pass judgement

grogdog

go to an ifa

Nonshy

Just need to apply for consent to let... will cost you about £250... that is official means but could be rejected

Andy's point was aimed at your "or by other means".... which does imply you would be wanting to act like your brother who presumably doesn't have CTL (that is my understanding with regards to the wording of your post).

Would be no real way for mortgage company to find out and implications aren't severe so all depends on whether you are wanting to be honest and up front or save yourself £250 and lie for a few years.... also means tenants may be opening your post from mortgage company.

Me personally, would just pay the fee and have piece of mind.

Each to their own

Tiddler_2

With regards to consent to lease then every company has different "rules" on this.

For example when I worked at the Halifax it was only agreed to if it was for necessity rather than personal preference (i.e working away as you are, rather than just wanting to buy another property to live in) and you did keep the deal you were on.

I understand that now they have special rates for people wanting to let their property out and whilst you don't have to pay any ERCs (penalties) on any current deals, the penalties are carried forward for the term of the original deal.

I think the main concern from a mortgage lenders point of view is that you want to apply for a new mortgage, and at the time of applying you KNOW you are going to let the property. Now if you are letting it to a family member then that should be ok on a residential mortgage, however if it is going to be a formal letting arrangement I can't think of any lenders who will agree to a new mortgage in the knowledge that you will letting the property.

You then may find yourself not telling the mortgage co that you are looking to rent the property out until after the remortgage is completed - this is where the potential fraud could be alledged - and having just remortgaged can you be certain the mortgage co will give that letting approval? If not it could be a very expensive mistake as they may ask you to pay any penalties.

The other point to be aware of is when you are applying for the new mortgage are you putting down your employer in Aus? If you are any sensible lender will ask the question, if you are working for an Aussie company are you going to be living in Aus.

Depending on LTVs and expected rental incomes, rates on Buy to Let mortgages can be quite similar - it's very often the fees that are alot higher. The other point being that Buy to Lets currently have a max LTV of 75%.

Rather than remortgaging it may be better to discuss it with your existing lender to see what their criteria is and would they let you have a new deal

alan_blue

thanks for the advise folks, I currently have CTL with NR but want to remort in feb you see. This is interesting as it seems possible to have a residential mort but depends on the lender? Any advice on lenders that are more flexible?

thg

I did a little research on just this question. Seems larger banks are more likely to allow this than smaller building socities. Some will just charge you a nominal admin fee others might load the mortgage rate by 1%.

I wonder what would happen if you were 90% plus equity and the rent didn`t cover the mortgage but you 'topped up' from abroad?

Its difficult to find out what the criteria are that the underwriters consider, nobody seems to be able to tell me.

alan_blue

thg, do you think the bigger lenders will allow at the remort stage from the outset?

Financially it will be topped up from abroad as we will be in forces accommdation at only £300 pm lol so aim to send back as much as poss to pay mort off asap

many thanks for the help

haras_nosirrah

If you are in the army and have forces accommodation, Natwest will allow you to have a property on residential rates and allow you to let the property when you are not in the country without loading the rate. It is an agreement with certain occupations who have the right to work accommodation such as forces, vicars etc. Check with Natwest or a broker.

Kemosabi0071

Is the property let already???

If so you have to set it up on buy to let or the mortgage application could certainly be deemed to be fraudulent