Second home or buy to let?????

nicol1980

Hi,

I currently own two homes. The first is the one I stay in and the second is a home I bought from my gran as a future investment. I currently have two mortgages and the one on my 2nd home (the one i bought from my gran) is due up for renewal.

I loved the look of the lifetime tracker 60 mortgage from HSBC and tried to move forward with it, however the first question I was asked was 'Is this your main residence?' When I told them it was not and explained that I bought it from my gran as a second home and that she currently stayed there rent free I was told they could not give me the mortgage as i would need to take out a buy to let mortgage.

My question is Why when no one is paying rent do I need a buy to let mortgage? This is not the type of mortgage I currently have on the house.

Is there any way round this?

Thanks in advance.

Thrugelmir

What type of mortgage do you currently have?

nicol1980

Thrugelmir wrote: »

What type of mortgage do you currently have?

I currently have a Halifax 2yr fixed mortgage due to run out on the 1st May.

Thrugelmir

nicol1980 wrote: »

I currently have a Halifax 2yr fixed mortgage due to run out on the 1st May.

When you obtained the mortgage. Who did you say would be living in the property?

nicol1980

Thrugelmir wrote: »

When you obtained the mortgage. Who did you say would be living in the property?

I told the truth. I told them my gran would be living at the address rent free for the remainder of her life. To me this is just a second home I own that I let my gran stay at.

Thrugelmir

I believe that HSBC only allow one residential mortgage per borrower.

One of the resident brokers may be able to assist you with sourcing an alternative mortgage. With a sitting tenant in situ, property is often worth 30% - 40% less in the open market.

nicol1980

Thrugelmir wrote: »

I believe that HSBC only allow one residential mortgage per borrower.

One of the resident brokers may be able to assist you with sourcing an alternative mortgage. With a sitting tenant in situ, property is often worth 30% - 40% less in the open market.

The rent free is not legally binding, it's more of a moral stance I have taken. Although, I think your right to suggest I take advice from either a resident broker or a financial advisor. Thanks for your help

herbiesjp

As long as your income can support both mortgages, there are lenders that will be happy with the scenario i.e. 2 residential mortgages.

You should get in contact with a good adviser, as it can be a minefield.

Thrugelmir

nicol1980 wrote: »

The rent free is not legally binding, it's more of a moral stance I have taken.

Though did you acquire the property at open market value?

nicol1980

Thrugelmir wrote: »

Though did you acquire the property at open market value?

No I bought the property for the price that my Gran owed on her mortgage.

nicol1980

herbiesjp wrote: »

As long as your income can support both mortgages, there are lenders that will be happy with the scenario i.e. 2 residential mortgages.

The value of the property is £65000 and the mortgage amount is £23000. The LTV is very low. I also earn £40000 per annum