Buy to let Q

noddynoo

If you have a buy to let mortgage is it taken into account if you apply for a residential mortgage? Some friends have a flat which they bought with buy to let mortgage and are now buying a house and say the buy to let mortgage isn't taken into account and it is 200k and has never been let they use it as a holiday home.Their new mortgage is huge and I am worried that when rates rise they will have 2 huge mortgages!

_Andy_

Any lender will want to know about any other mortgages - however usually if the rental income meets/exceeds the mortgage payment they will ignore it in terms of outgoings.

noddynoo

The flat has never been let the only way they could finance a second home was with a buy to let mortgage.I think it sounds dodgy tbh but I am obv not an expert.there are no tenants never have been.

_Andy_

OK so not good news - fraudulent mortgage application.
Assuming they don't want to commit fraud again (by creating fake AST etc) and risk a prison sentence, it would have to be declared as a second home which would reduce their maximum borrowing.

noddynoo

Ok I need advic here as I told them that and they said I was ridiculous.They had a house which they completed on last month and they are living in the buy to let flat while they wait to buy new place.they have made an offer and had it accepted and are applying for a mortgage on new place but haven't mentioned the btl loan on the forms.I thought they would show on credit check but they are porting the mortgage from their sale and think they don't do checks again.So 2x 200k mortgages on seperate properties and they live in both!Will they get into trouble I am worried as one of them is close family member

_Andy_

Any porting case is treated as a new applicaiont so the checks will definetely be done again.

luckyfool

however if the other property is declared as a buy to let then normally most lenders take that on trust where it is already established.

noddynoo

thanks andy I am an interior designer(was) so they come to me for hopuse type advice but this is beyond me.The mortgage amount on the btl is already about 3x joint income and interest only so i am amazed at their getting another 220 ish for another house!They haven't even declared the btl mortgage in the new application as they are under the imprssion it doesn't count

_Andy_

It will come up and the underwriter will query it straight away.

nickmack

I'd be suprised if this wasn't picked up by the lender before approval. The existing loan must show up with one of the credit agencies.

noddynoo

Ok will tell them.If that happens will they deduct that from what they can borrow?