Can you rent a property out without a buy to let mortgage?

theartfullodger

jeec:

If you are offended by anything I posted, unreserved apologies.

However it may be worth contrasting 2 types of "advice"
- a) The sort you get from people who are really only interested in gaining their ££££ commission and will (IMHO) possibly be inclined to tell you what they think you want to hear/what-will-get-them-the-deal.
- b) The sort you get here: Free, sometimes a bit direct, said honestly & usually correctly (we all make mistakes) and if taken as a whole worth shed-loads and may save you loads & loads of bother...

Cheers! Hope it works out somehow....

Lodger!

PS Assuming (as is very possible) the EA/Mortgage adviser is/are following these posts, what have you to say lads???

mlz1413

jeec wrote: »

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We bought the house, because it was extremely cheap, one option was to renovate and sell on for a profit, the other option was to possible let it out. We did research, but whenever you ask a question on here, you get slated.

Sorry but these are not the only options, you could have purchased to do up and LIVE in. You could have not purchased and allowed someone else to do up and LIVE in!

Taking a cheap house out of the market place for personal gain is fine IF you are aware of what you are doing - ie buy do up and sell = pay capital gains tax on profit or buy do up and rent out = becoming a land lord and meeting a number of requirements - ie smoke alarms, deposit schemes, registering with HMRC for starters that I'm pretty sure you will not have thought about.

At first I agreed you were learning, but then you say you 'did research' only to find out that was merely how much money you would make.

sorry to get on my soap box so early in the morning, but take a good look at why you are buying this house and the method you are proposing to buy it under - ie a residential mortgage not a buy to let mortgage.

Snooze

Whilst the replies on the first page are correct, there's also a lot of scare-mongering being passed around too, eg. "if the lender finds out you'll get your house repo'd" :rolleyes:. Seriously, it's clear whoever wrote that doesn't actually have any real experience or knowledge of anyone that's done it otherwise they would realise that that is not the case at all. The lender doesn't give a toss what you do with the property (other than burn it to the ground or knock it down) as long as they're getting the monthly mortgage payment. The only reason they're interested in finding out if someone is doing it is so that they can squeeze some extra dollars out of them for doing pretty much f-all except altering a couple of lines on a computer screen.

I have let properties before on a residential mortgage and would do again if it came to it. It's not something I'd recommend people do unless you're prepared to stomach the fall-out should it all go tits up but I personally don't see the problem with doing it so long as you keep making the repayments on time and you keep your trap shut.

R

jeec_2

mlz1413 wrote: »

At first I agreed you were learning, but then you say you 'did research' only to find out that was merely how much money you would make.

Im sorry but at what point did I say i only researched how much money i would make? I thank everyone for there advice, and I take it all onboard. I have researched it, and i now know there is so much to find out, and learn.
The reason why I want to do this is because I work very hard at my job and save a great deal of money, for somebody my age. What is the point in saving a lot of money and not doing anything productive with it? I just thought this was the best way to go, seen as I will want a house of my own one day, so its good to get on the laddder.

jeec_2

Also im putting 20% down, so if i make a few payments ontot he mortgage I will have the 35 / 40 % equity required to havea buy to let mortgage anyway.

JOSOM

jeec wrote: »

If I still live at home (with parents), and have bought a house, can I rent this out to a tennant legally and above board? The mortgage advisor said this is ok, seen as its the only house I own. Could you confirm this for me?

Thanks

Most Loan Instructions will have a clause stating what the loan is for eg private dwelling and that the property must no be let out without their knowledge or consent. Your Mortgage Advisor has ill advised you and you should speak to your lenders before you go down this route!!!

Thrugelmir

Snooze wrote: »

The lender doesn't give a toss what you do with the property (other than burn it to the ground or knock it down) as long as they're getting the monthly mortgage payment. The only reason they're interested in finding out if someone is doing it is so that they can squeeze some extra dollars out of them for doing pretty much f-all except altering a couple of lines on a computer screen.

Interesting post. Hardly sound advice to give to a novice purchaser.

I guess you're the guy thats drives 50 mph in a 30 mph limit. As until the police catch you whats the hassle.

In the not too distance future I wouldn't be suprised to see a national database of all landlords and let property. The HM Customes and Revenue are taking a close look into this area as well at the moment. I'm sure financial institutions will find the data interesting as well. As you say they can levy higher interest charges on BTL.

foi1983

jeec wrote: »

Also im putting 20% down, so if i make a few payments ontot he mortgage I will have the 35 / 40 % equity required to havea buy to let mortgage anyway.

I think it will take more than a few payments until you get to 35/40% equity unless you make significant overpayments.

If you are taking out a repayment mortgage, then your mortgage payments will comprise both interest on the loan outstanding and capital repayment.

You usually pay off mostly interest in the early years and then gradually more of the capital debt. It may seem as if this is costing more but that's because unlike the other types of mortgages you're paying off the capital and not just the interest.

Thrugelmir

foi1983 wrote: »

I think it will take more than a few payments until you get to 35/40% equity unless you make significant overpayments.

If you are taking out a repayment mortgage, then your mortgage payments will comprise both interest on the loan outstanding and capital repayment.

You usually pay off mostly interest in the early years and then gradually more of the capital debt. It may seem as if this is costing more but that's because unlike the other types of mortgages you're paying off the capital and not just the interest.

It takes around 9 years to repay 20% of the capital balance on a 25 year mortgage. After 15 years 60% of the capital is still outstanding.

GSXRCarlos

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