First time buyer, BTL

ftb-btl

Hope you can help.

I have capital available which I want to invest in property whilst helping a family member.

I wish to buy a house for myself, and a house for a family member to rent off me. Each mortgage will be on a 60% LTV.

I know there are BTL mortgages available for FTB, from Northern Rock and Woolwich, amongst others. These mortgages, however, don't permit letting to family members.

There are also mortgages available that allow letting to family members, but these aren't open to first time buyers.

It wouldn't be as simple as completing on my mortgage for my own residence first then completing on the BTL mortgage either as for a BTL lender to not consider you a FTB you need to have owned your own home for a year.

Now I have a question shrouded in ulterior motive and bad practice, which of course I couldn't pose to any brokers or lenders -

What would the implications be of buying a property on a BTL basis and not volunteering the information that it would be let to a family member? On a "not asked, not told" sort of basis. Not lying, just not volunteering the information?

I understand that with a residential mortgage if the lender finds out the property is being let they typically get narked and get their own back as it were by loading the interest rate by 1% or 2% but not seeking possession or sale of the property.

I wonder if the same would apply for a BTL mortgage where the lender later found out the property was being let to a family member? Would they be likely to seek redemption of the mortgage through the sale of the property or just "retaliate" by loading the interest rate? I would be fine with the rate being loaded, btw.

I'm fully expecting a load of slack and rollockings from various members and frankly I deserve it to a certain extent, but any advice that can be offered that enables me to accomplish what I'm looking to do would be greatly appreciated.

Thanks in advance :beer:

ACG

complete on your house first, then complete on the BTL - then your not a first time buyer on the BTL.

ftb-btl

From what I've learned however lenders who don't offer BTL to FTB require that you've owned your home for at least one year

ACG

60% LTV i doubt you will have too much of a problem. If the rent easily covers the monthly repayments you should be ok.

You might think im slightly biased here but it might be worth going via a broker, we have access to account managers at different lenders. We can run your situation by them before applying so before any credit checks and applications are done.

ftb-btl

I already have spoken to a broker and they've drawn a blank. It was a large, well respected broker (the broker )

I've been told by Coventry BS, for example, that they are happy to offer a BTL mortgage for let to a family member based on the 125% at 5.99% rule, but not to first time buyers.

Their underwriters stated that they would need me to have owned my own home for at least six months.

mildred1978

ftb-btl wrote: »

I already have spoken to a broker and they've drawn a blank. It was a large, well respected broker (the broker )

I've been told by Coventry BS, for example, that they are happy to offer a BTL mortgage for let to a family member based on the 125% at 5.99% rule, but not to first time buyers.

Their underwriters stated that they would need me to have owned my own home for at least six months.

There's your answer then.

ACG

To be honest we just run situations by companies, we dont use names of people so i wouldnt worry about that too much.

Im sure there will be ways around it, ive not looked into it so cant give you a cast iron guarantee but im sure there will be a way.

ftb-btl

No indeed, but I was wondering the implications of purchasing the property on a BTL and "not telling as wasn't asked" that the tenant will be a family member?

I mean it would be temporary anyway as I would be able to remortgage to a product from a lender like Coventry who are happy with family member tennants when the initial mortgage introductory period runs out anyway as I wouldn't be a FTB or FTL by then but I do need to get this done now, it is a bit of an acute situation with the family member.

Basically I'm weighing up the pros and cons of withholding certain information from the BTL lender...

GMS

ftb-btl wrote: »

No indeed, but I was wondering the implications of purchasing the property on a BTL and "not telling as wasn't asked" that the tenant will be a family member?

I mean it would be temporary anyway as I would be able to remortgage to a product from a lender like Coventry who are happy with family member tennants when the initial mortgage introductory period runs out anyway as I wouldn't be a FTB or FTL by then but I do need to get this done now, it is a bit of an acute situation with the family member.

Basically I'm weighing up the pros and cons of withholding certain information from the BTL lender...

Simple answer is it will be a fraudulent application which is liable to mean you will struggle for credit in the future.

There will be a question along the lines of 'Do you intend to let 40% or more of the property to a family member?'

Answering no will be fraud.

I had a Business development Manager recently tell me family BTL were no issue. Definitely speak to a broker to see if you can do this legitimately. If you can't then walk away. Not worth the risks.

Thrugelmir

ftb-btl wrote: »

No indeed, but I was wondering the implications of purchasing the property on a BTL and "not telling as wasn't asked" that the tenant will be a family member?

Google https://www.nhunter.co.uk

Fraud is taken very seriously. Only you can decide whether its worth the risk.

ftb-btl

Oh yes, I know all about National Hunter, CIFAS, and how serious fraud is!

But if I'm not asked a question, I'm not committing fraud, am I? Only if I lie would I be committing fraud, surely?

I will speak to Coventry BS on Monday when the Underwriters are in as they did say their BTL products are only available to homeowners but are permissible in family lets - I will try to see if I got both the residential and BTL products from them if that would be sufficient for them to not consider me a FTB.

With regards brokers you're absolutely right - but I've already been with the biggest and oldest broker in the country and they simply can't find any lenders that offer a FTB BTL mortgage with allows family lets. No such product exists

Poosticks.