Residential mortgage on buy to let, is it possible?

Baking_Mad

This is a hypothetical question.

Can a couple that do not presently own a property buy a house with the view of renting it out, but buying it with the straightforward residential mortgage?

What pros and cons are there in this situation?

betmunch

only under a very specific set of circumstances. In general termsthe answer is no, not without committing mortgage fraud.

Thrugelmir

Void insurance cover.

Potential black mark on shared lenders database.

holly_hobby

If you intend and do let from outset it would be mortgage fraud - your buildings & contents ins would be invalidated - and the mge lender upon discovery would certainly immediatly put a loading on your rate (or move you to a BTL mge if they market such a scheme) - the loading will be no doubt be calculated from outset i.e when the mge commenced. More seriously they may refrain from doing this, and simply demand that you immediately redeem your borrowings with them (ie seek a new lender). Reference would also be placed on your record of the events.

If however, you bought the property as your primary residence, you may be able to seek the lenders "consent to let" - which would mean that although you are technically in breach of your residential mge terms, this with the agreement of the lender. Consent To let is usually granted with apx a 3 yr shelf life - then its reviewed (some lenders use a 12 mth review).

Hope this helps

Holly

Yorkie1

Following on from Holly's post, don't assume you can buy it as your main residence and then try to get CTL within a few weeks or even a few months of buying it - the lender is highly likely to wonder what you're playing at and suspect fraud from the outset.

As regards the fraud consequences, not only would you be on a black list for lenders, but it's likely to mean you can't get other types of financial products such as any insurance.

Far too risky.

Baking_Mad

Great, thanks very much everybody. Didn't realize it was this complicated and potentially dangerous. Thank you for explaining things to me.

holly_hobby

Yorkie1 wrote: »

Following on from Holly's post, don't assume you can buy it as your main residence and then try to get CTL within a few weeks or even a few months of buying it -

Sorry yes, I thought I'd put that in .. thanks for raising it Yorks.

H x