what sort of mortgage can my OH get

ninky_2

i own a property that is in my name as is the mortgage. this is our marital home.

rather than my OH pay into the mortgage or change it into both our names we are mulling over the idea of him buying another property in his name.

whilst we want a mortgage that he can cover with his income alone, we also want to rent this property out.

does he need to get a btl mortgage or will he be able to get a standard mortgage? will it be an issue if we ever want to live in it ourselves?

as well as considering a rental property we are considering somewhere that could be a holiday let that we could also stay in sometimes. are there any companies that specialise in this sort of mortgage or can he just get a standard mortgage?

happybroker

Mortgages for holida lets are available though not as widely as for a property to be let on a full tenancy agreement.

If you are buying a property with the intention of letting it then you would need to apply for a buy to let mortgage.

ninky_2

however, as i understand it, buy to let mortgages are usually for people who already have an existing other mortgage (not first time buyers like my OH). what would happen if he got a standard mortgage but decided to rent it out? this must happen a lot - e.g. people who decide to go travelling for a year etc. do they always have to change their mortgage product?

Hugbubble

ninky wrote: »

however, as i understand it, buy to let mortgages are usually for people who already have an existing other mortgage (not first time buyers like my OH). what would happen if he got a standard mortgage but decided to rent it out? this must happen a lot - e.g. people who decide to go travelling for a year etc. do they always have to change their mortgage product?

FTB or existing homeowner- no matter, it's still a buy to let

As I understand it, he couldn't get a standard mortgage as he has no intention of living there. People more knowledgable than me will be able to confirm but I understood many lenders will not agree to a consent to let for a minimum period of time after the mortgage was taken out.

happybroker

buy to let mortgages are for people who are looking to buy a property to let regardless of their other commitments.

If you apply for a standard residential mortgage, one of the questions asked on the application is if you intend to use the property as your main residence. If you say yes to this and are not intending to do so then that's lying to the mortgage company.

If you have a property with a residential mortgage and then decide to let it you need to obtain the consent of the lender and they are within their rights to say no. If they do not consent and you let the property anyway this will put you in breach of your mortgage conditions, can cause problems enforcing your tenancy agreement and nullify your insurance.

Don't be tempted to do this any way but the correct way, honestly it's not worth it. If he takes a loan out to buy the property (buy to let mortgage) he can off set the interest payment against income tax on the rental income so it's not all bad!!

ninky_2

happybroker wrote: »

buy to let mortgages are for people who are looking to buy a property to let regardless of their other commitments.

If you apply for a standard residential mortgage, one of the questions asked on the application is if you intend to use the property as your main residence. If you say yes to this and are not intending to do so then that's lying to the mortgage company.

If you have a property with a residential mortgage and then decide to let it you need to obtain the consent of the lender and they are within their rights to say no. If they do not consent and you let the property anyway this will put you in breach of your mortgage conditions, can cause problems enforcing your tenancy agreement and nullify your insurance.

Don't be tempted to do this any way but the correct way, honestly it's not worth it. If he takes a loan out to buy the property (buy to let mortgage) he can off set the interest payment against income tax on the rental income so it's not all bad!!

i thought buy-to-let products were only available to those with an existing residential mortgage but clearly i'm wrong on that.

i'm pretty sure you can offset interest on a loan for business anyway regardless of the product. for example, if you took out extra lending from a residential mortgage or a loan to fund a deposit the interest on this would still be classed as a business expense.

i wouldn't want to do anything illegal. i would certainly want to get a consent to let. i just thought you could do this on a standard mortgage. buy to let products are fairly new so what did people do before buy to let mortgages were available?

if we wanted to live in the property for six months and rent if for another six months on a short term tenancy wouldn't a consent to let be more appropriate? switching mortgage products every six months is hardly practical (or affordable)

happybroker

I think I've come accross as a bit of a stickler in previous posts, but didn't mean to, sorry. I've been on the telephone for most of the time so perhaps I didn't consider the tone of my posts!! (is that's possible!)

You can off set interest on loans taken for the purchase of investment property and the security for the loan isn't an issue (secured on own home etc), your correct.

Buy to let products aren't any younger than buy to let borrowers really, there used to be a fraction of the number of landlords there are now and those that there were (in the old days!) did it for a living. Commercial finance was used often and was still available before the banks "popped". It's starting to come back for property investment but not at attractive terms.

Re mixing letting and living there, the lender's consent to the let can't be g'teed unfortunately which could cause an issue obviously.

ninky_2

i didn't think you were a stickler - all input gratefully received. i was hoping for a few more answers from different people. ah well.

are there any lenders that are known as being difficult over consent to let or any that are easier? as i understand it there can also be issues the other way - getting a buy to let mortgage when you actually plan to live in the property.

are there also issues with holiday letting a property that is on a residential mortgage or is that okay?

V_J_Conn

Yes there are lenders that are happier than others re renting out, I think it depends upon the reason you present them with, but in todays climate they are sympathetic particulalry if your payment record is up to date.

If you already owned the property you would ring the lender and ask thier advice re renting or using as holdiay let, as lenders change criteria on a regular basis.

Buying the property without knowing the purpose makes your questions harder to answer as you have to be honest with the lender and it maybe a different lender you would apply to for each scenario

good luck:)