Buy to Let mortgage, Vs First time buyer mortgage? what are the differences?

holly_hobby

The differences have been clearly explained.

Buy To Let
Property to be commerically let on AST (ie not a guest house or hostel) - affordability largely based on rental income (notwithstanding any min income requirements)

Residential mge
Property to be the applicants primary (main) residence - affordability based on earned/retirement/invesment income.

Any clearer ?

If you want to buy a house, that is not to be your primary residence or permantely commerically let, and as you say will just be a place for visiting friends and family to decamp to when visiting, you have occuancy issues affecting buildings ins and the mge itself ... ie resi & comm building ins are invalidated for periods of unoccupancy of 30 consecutive days or more. Invalidated blds insurance will mean a breach of mge terms & conditions.


Holly

Milky_Mocha

Looks like I wouldn't qualify for a residential mortgage anyway then because it would not be my main residence. I don't know if there's another third type of mortgage that would fit my requirements but a buy to let seems best as it would give me the flexibility to let it out for as long as I want, whenever I want.

Thanks. I'll look into rates now.

holly_hobby

Most lenders want evidence of an AST - so effecting a BTL for a family/friends sleep over, may not be nearly as easy as you think !

Furhtermore if you are a FTB you'll find locating a BTL lender nigh on impossible.

Hope this helps

Holly

Milky_Mocha

Hi Holly

I've only just seen the bit of your post about occupancy? Did you edit your post?

I've always wondered what would happen if I responded 'no' to that insurance question of whether it will be unoccupied for a certain period. I'd assumed the premium would simply be higher. How much higher I don't know. I'd also presumed there would be some insurers who would not provide such cover at all.

I'll have a chat with a mortgage provider and a mortgage adviser as well.

Your responses are much appreciated.

Milky_Mocha

holly_hobby wrote: »

Most lenders want evidence of an AST - so effecting a BTL for a family/friends sleep over, may not be nearly as easy as you think !

Furhtermore if you are a FTB you'll find locating a BTL lender nigh on impossible.

Hope this helps

Holly

No I wouldn't be a FTB. That was over ten years ago!

holly_hobby

There may be issues with no active mge within the 12 mths proceeding BTL application.

There are providers whom offer B&C for properties that have extended periods of unoccupancy - but whether the unoccupany period (regardless of the ins in place) would separately breach the lenders own mge T&Cs would be a suck it and see exercise .. my own thoughts is that it wouldn't be acceptable if declared .....

Futhermore, as the property is not to be let on an AST or any regular basis, affordability (if the lender is happy with the basis of occuapancy etc) would certainly be based on your own income (ie salary and any other proven and regular income) - as I don't think this will fit a BTL arrangement (inc regulated if for family occupancy), and would really be more accurately described as a private (non-primary) residence, which would be the correct residency basis used when placing in the market.

If you however elected to fully let commercially for market rental income, then BTL would be the way to go with this.

A chat with a whole of market broker will establish what your options are given your circs and requirements.

Hope this helps

Holly