Buy To Let

musclebeach

Hi,

Im planning on buying a buy to let property, upon researching and getting quotes from a broker, the interest rate is far greater to get a buy-to-let Mortgage, than to get a Mortgage for a home i will be living in.

Is there anything stopping me from getting a 'standard' Mortgage and then just letting out the property?

Im guessing I cant do this, that's the reason for special but-to-let Mortgage but would be interesting to know why it cant be done.

Thanks

ACG

the Buildings insurance would not be valid and the lender does not allow it. Although im sure a lot of rented properties are purchased under a normal residential mortgage but i wouldnt recommend doing that.

There is nothing stopping you raising a Mortgage on your home proerty to purchase the BTL outright though...if this is affordable.

GMS

Renting out a property with a residential mortgage in place and no consent to let from the lender would be a breach of the terms and conditions.

Raising a residential mortgage with the intention of renting it out is fraud. You may get consent to let granted after a period, typically 6 months but this is usually for a change in circumstances. If you intend to let from the start then get a Buy to Let mortgage.

Thrugelmir

musclebeach wrote: »

Im guessing I cant do this, that's the reason for special but-to-let Mortgage but would be interesting to know why it cant be done.

Thanks

Buy to Let isn't special. In simple terms its commercial lending as opposed to consumer.

The higher rate reflects the additional risk of the lending. Which isn't just related to the payment of the debt but other factors as well.

musclebeach

Thanks, thats just what i thought.

I cant raise a Mortgage on on my home property to purchase the BTL as I dont have a property, im still living with my parents. The advisor did tell me what I would be limited to Mortgage options as this is my first buy, and i dont have my own home. We have a 30,000 deposit and income of £54,000 (shared income) One he came out with was with Northern Rock 5.29% fixed for 2 years, and then Northern Rocks standard variable rate kicks in which is currently at 4.79%. The property is £110,000

holly_hobby

You are a FTB, which is where the difficulty is coming from in securing a BTL mge.

BTL rates are higher than residential, as Thurls has correctly stated, this is actually semi-commerical (aka business) lending - as you have to remember this is what operating a BTL and acting as a landlord is.

If your "adviser" is aware, that you wish to purchase a property to let, yet they are actively encouraging you to conceal this fact, in order to a secure a residential mge. They are also liable and complicient in any fraudulent mortgage prosecution that the lender may bring - in fact they are clearly the instigator of such.

Although very disappointing to hear that there remain some dubious advisers out there, they are in the minority, please don't put yourself in a position that may have serious consequences for all involved.

GMS has discussed the letting of a property without lender consent.

You have been warned ...

Hope this helps

Holly

musclebeach

holly_hobby wrote: »

You are a FTB, which is where the difficulty is coming from in securing a BTL mge.

BTL rates are higher than residential, as Thurls has correctly stated, this is actually semi-commerical (aka business) lending - as you have to remember this is what operating a BTL and acting as a landlord is.

If your "adviser" is aware, that you wish to purchase a property to let, yet they are actively encouraging you to conceal this fact, in order to a secure a residential mge. They are also liable and complicient in any fraudulent mortgage prosecution that the lender may bring - in fact they are clearly the instigator of such.

Although very disappointing to hear that there remain some dubious advisers out there, they are in the minority, please don't put yourself in a position that may have serious consequences for all involved.

GMS has discussed the letting of a property without lender consent.

You have been warned ...

Hope this helps

Holly

I used the work advisor, he was a broker, the first id consulted with at the Taylors estate agents. He was pretty much open and helpful (well he wants his commission doesnt he :-) but i learnt alot from him.

I wasnt intending on getting a Mortgage, and letting out the property, i was just interested in knowing why it cant be done, at least i know now.

GMS

Northern Rock do 70% LTV maximum on BTL if I remember rightly so you would need a higher deposit, another £3000 based on a purchase price of £110,000. Do you have this?

musclebeach

GMS wrote: »

Northern Rock do 70% LTV maximum on BTL if I remember rightly so you would need a higher deposit, another £3000 based on a purchase price of £110,000. Do you have this?

Hi, yes we could put in another £3000 no problem