Residential mortgage with permission to let.

nathan1986 · 5 January 2012 at 12:41PM

Hi All,

Ive always recieved good advice and thought it would be worth running a situation by you.

I have been talking to my brother who is currently looking for a mortgage for a property that my grandmother is selling. he is getting at a fair price (80k) and doesnt have 25% for a buy to let mortgage. He has a spotless credit rating, no debt. He earns approx 25k per year with an NHS job, no dependants and so on.

I have heard that once a residential mortgage goes though some lenders will give permission to let? If this is the case which lenders usually allow this. In many cases I think he would have the pick of most lenders with his situation? I have heard that some people get a residential mortgage but do not tell lender they are renting it out? What are the consequences of this?

Thank you in advance.

Nathan

domcastro · 5 January 2012 at 12:44PM

He would still need a deposit for a residential mortgage
There may be a time limit for applying for consent to let after taking the mortgage
Could risk just renting it out -but is it worth it?
I have a consent to let with C&G - cost one off fee of 225. Other lenders have different T&Cs
Does he already own a property?

Wh05apk · 5 January 2012 at 12:57PM

"most" lenders will allow it in genuine circumstances, however I get the impression here that he is looking to buy as a BTL, can't get the deposit, so will make a fraudulent application as a residential, then once complete "decides" he won't live there and wants to rent out?

nathan1986 · 5 January 2012 at 1:28PM

He will no be making any fraudulent applications - weve asked the question because we are unsure? I thought this is what the site was for?

domcastro - This will be his first property purchase

thanks

Nathan

holly_hobby · 5 January 2012 at 1:36PM

Wh05. is absolutely correct - if he intends to rent the property from outset, any residential mortgage application would indeed be fraudulent (withholding/concealling of relevant data).

The site, when obtaining advice from professional advisers, is designed to assist in solving problems, issues, queries etc - WHILST remaining lawfull, no diligent professional on a forum (or indeed in servicing their private clients) would ever compromise themselves, in providing advice that wasn't within financial law or within industry criteria - and they shouldn't be expected to do so.

Hope this helps

Holly

nathan1986 · 5 January 2012 at 1:46PM

Yes I understand and would expect no less than lawful advice, "so will make a fraudulent application" could have been "if he was to make an application it would be fraudulent" explaining the reasons why. Thats why I asked the question originally

Thanks

Nathan

Wh05apk · 5 January 2012 at 2:06PM

nathan1986 wrote: »

Yes I understand and would expect no less than lawful advice, "so will make a fraudulent application" could have been "if he was to make an application it would be fraudulent" explaining the reasons why. Thats why I asked the question originally

Thanks

Nathan

If he makes the application on a residential basis, "knowing/expecting" that he will not be living there, and so will be renting it out, then that will be fraudulent (with the exception of a few lenders who will allow forces personel to do this)

Also if this is his first property, few lenders would allow it on a BTL basis anyway, as most now insist that you own a residential property, in order to avoid the opposite situation of people with insufficient income for a residential mortgage taking on a btl basis and living there.