BTL lender saying it cant be lived in

delb0y

Folks just a quicky question for a friend of mine. Hes bought a house with BTL hes told me on the lenders forms it stated that the property couldnt be lived in and couldnt even be rented out to family! Which i found abit odd. Usually its the otherway round ie if you get a residential mortgage then that couldnt be rented out according to some lenders.


I think the buy to let hes got is from a company which is part of the nationwide

Debt_Free_Chick

Is it possible that what they mean is ..... HE cannot live in the house and he cannot rent it to HIS family i.e. it must be a completely "arms-length" investment property which does not involve his family ....?

djm1972

This is normal.

A BTL mortgage is offered on the condition that rental income will be in place in order to fund the repayments.

If it were the case that it was OK to live in your BTL property then anyone that couldn't get a mortgage based on affordability would just get a BTL mortgage, which obviously makes a nonsense of the situation - which is why this condition exists.

Debt Free Chick is spot on - a BTL mortgage is for an "arms length" investment, they're worried that if you start letting to family then you might not be so strict (if at all) with the rent; and again it's that rent that means you got the BTL mortgage in the first place so there must be no compromising it.

The other way round is less of a problem - if you have a residential mortgage then the conditions of affordability have already been met; and so if you want to rent the place out you normally only have to ask for permission (and may also have to pay admin fees etc.)

herbiesjp

If you let out to family it then becomes a regulated mortgage contract - currnetly all other BTLs are unregulated mortgage contracts.

There are lenders however that will allow you to let out to family, so if that is what you intend to do, you should still be ok.

delb0y

Thanks for the info folks.. Just another question this time its a residential with the northernrock. I may have to rent the place out as im working away from home. Does anyone know what they are likely to charge me ?

Cheers

djm1972

There's a current thread on charges for consent to let...

http://forums.moneysavingexpert.com/showthread.html?t=325720

delb0y

Cant find anything on that thread.. the mortgage is with UCB loans they are owned by nationwide
... any advice on this would be apprecitated

cheers del

silvercar

need further info, what do you want to do? rent to family? live in it?

delb0y

Its a joint mortgage the family member couldnt get the loan just in his name as he had no credit history and his income wasnt enough. So my friend has had to get joint loan. The house will be lived in by the family member ie it wont be let out

herbiesjp

So the family member has a joint mortgage with the family friend and he is going to live in it.

Why has he gone for a BTL mortgage?

delb0y

herbiesjp wrote:

So the family member has a joint mortgage with the family friend and he is going to live in it.

Why has he gone for a BTL mortgage?

Hes gone for a BTL cos he couldnt get a loan based on his earnings and he wasnt on the voter role.