Renting a house on non buy to let mortgage

jojo2910

Hi,

My OH and I are at the start of a house buying process as FTBs. We have saved hard and have found a property we like. The trouble is the house will be up in Shropshire, whilst we are working in the Bristol area (Shropshire is where we want to settle) and will be working down here until Spring/Summer next year.

We wondered could we buy the house and then rent it out without a buy to let mortgage but on a normal capital repayment mortgage? It would only be for about 6 months and then we would look to relocate jobs up there and move into the house.

I appreciate we could just sit tight and not buy and continue to save, but we want to take advantage of current circumstances e.g. we're earning more at the moment (which will make mortgages easier) and likely more than we will in Shropshire and market prices are good.

All advice appreciated.

Werdnal

You can get consent to let from some lenders, but if you are buying with specific wish to let it immediately, then I would suspect many would be very suspicious of your original intentions.

The reason residential loans are better terms, is that the lender considers there to be less risk in you living there, than having tenants. If you break the terms of the loan that you have accepted, stating you will be resident, they will not be happy. Worst that can happen - recalling of the loan and repossession. Don't start you first step on the mortgage ladder by getting black mark against you. It may make it much harder for you to get credit and loans in the future.

Do it properly or not at all. Besides, a lot of savvy tenants these days, know they need to ask for proof you have BTL or Consent to let, and will run a mile from renting from you.

theartfullodger

So, you're planning on signing a contract (mortgage...) then plan to ignore the terms?? What goes around comes around - you'll be thinking it'll be OK for the tenants to ignore the terms of their tenancy agreement then eh??

BitterAndTwisted

Please don't do it. Some experienced tenants can spot an amateur landlord from a mile off. Apart from breaking the terms of your mortgage, becoming landlords is not a secure route to guaranteed wealth and happiness.

Save up some more and buy when you're ready to relocate. Property prices are not going to shoot up in the immediate future. Just look at what's happening to share-prices right now.

jojo2910

theartfullodger wrote: »

So, you're planning on signing a contract (mortgage...) then plan to ignore the terms?? What goes around comes around - you'll be thinking it'll be OK for the tenants to ignore the terms of their tenancy agreement then eh??

As a first time buyer I've never seen a mortgage contract and don't know how a 'standard' mortgage differs from a buy to let. I wondered if you are in a position to rent a house out on a standard mortgage or if you can only do this on a buy to let.

BitterAndTwisted

You are not in a position to apply for Consent To Let five minutes after buying a property on a residential mortgage. That could be viewed as mortgage fraud and may be treated by the lender as such. Depends on your attitude to risk and whether you could afford a BTL which requires a much greater amount of equity being put in. About 25% I think.

hazyjo

Standard mortgages are far cheaper! You won't get a BTL mortgage on your first property without having owned anything else (to the best of my knowledge). Usually, if someone has an existing mortgage and needs to then let their house out, they can ask for permission - sometimes it incurs a fee (some hefty, some reasonable) - but there's no guarantee the mortgage provider will say yes.

I doubt very much if you'd get a 'normal' mortgage with permission to let your property out from the outset.

I'd definitely wait. Just take a look at some of the LL threads on here. Definitely more hassle than it's worth - there's a hell of a lot involved! And what if they don't leave? Nah, not for me - and not something I'd recommend to anyone in your shoes. Just wait...

Jx

hazyjo

PS When you say: "e.g. we're earning more at the moment (which will make mortgages easier) and likely more than we will in Shropshire" - that is absolutely no way to start off. Firstly, I imagine it would be classed as mortgage fraud, and secondly, why on earth would you want to stretch yourselves to beyond what a bank would consider your means? Just wait until you know what your salaries will be once moved, then see how much you can borrow, then look.

Jx

jojo2910

Thanks very much for the advice, we have firmly abandoned the idea.