First and second home Dilema

thomson_adam

holly_hobby wrote: »

You are looking at an absolute minimum of 6 mths ownership for the lender to even begin to consider granting CTL - and it won't be given if they feel that you actually purchased with the intention to let, essentially using the resi mge & subsequent ctl application as essentially a back door to securing BTL finance.

If CTL is refused and once it is refurbed wanted to remortgage it onto a BTL mge (max 75% for a first time landlord), then the lender will ordinarilly want to know that you will simultaneously be purchasing your own primary residence (ie not remaining resident in the let property).

Whats important for you to note re this 2nd house offer, is that from a lenders point of view, there can't be any arrangement for a deposit on a property being purchased - lenders (except in the case of family discounted purchases and RTBs), want a monetary deposit exchanged - as Vendor gifted deposits are no longer permitted.

Hope this helps

Holly

Thank you very much holly . I think this wont be renovated until the 4 month mark so I may live in it over the summer which may be enough time .

As for the second home my friend is selling below the valuation so he was going to deposit the money with my solicitor then when it all goes through he gets the money back .

I know plenty of people with many houses and I know for a fact they have used loop holes etc etc . A work colleague bought a house , rented it out then remortgaged to fund his next one but told the mortage company he never had a houses

Thrugelmir

thomson_adam wrote: »

As for the second home my friend is selling below the valuation so he was going to deposit the money with my solicitor then when it all goes through he gets the money back .

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Have you cleared this with a solicitor to see its acceptable? Or just an idea to get the round the rules.

Maybe this has been attempted before.

holly_hobby

thomson_adam wrote: »

I know plenty of people with many houses and I know for a fact they have used loop holes etc etc . A work colleague bought a house , rented it out then remortgaged to fund his next one but told the mortage company he never had a houses

That may well be, but its not using a "loop hole" which makes it sound somehow harmless, its actually mortgage fraud - which if discovered carries serious consequences inc being registered on the industry's anti fraud system, which will follow you for ever.

Regarding the deposit being provided by the vendor - this would have to go through YOUR conveyencer whom would then forward it to his. Again several issues, main one being, you'll be asked for the source of it, and possibly an audit trail ... so obv you would have to lie as vendor gifted deposits are not permitted either monetary or at sale under value .... so the web is getting ever more tangled, with more and more people involved.

Of course I and the other advisers here know "ways round" and "backdoors" to most situations - but we would never voice or recommend them to aonyone.

Stick to the straight and narrow, play things by the book, and then you won't compromise yourself and others or have any sleepless nights .

Hope this helps

Holly x

thomson_adam

Holly
Again thanks for your detailed reply ..... I don't understand how they would find out and why would they want to Aslong as no payments are been missed .

If I can into your office and told you I wanted to build my property portfolio what would you suggest to me?

GMS

thomson_adam wrote: »

I don't understand how they would find out and why would they want to Aslong as no payments are been missed .

You don't need to understand how, though you have been given plenty of good advice as to why it is best avoided.

Whether you take the advice on board is obviously your choice.

Thrugelmir

thomson_adam wrote: »

Again thanks for your detailed reply ..... I don't understand how they would find out and why would they want to Aslong as no payments are been missed .

Do you understand the meaning of the legal term "breach of contract"?

holly_hobby

Believe me they have ways and means, indeed there are stories on here where just this very thing has happened.

I can see that although you apprecaite the guidance, you don't really want to accept it, given that others have seemingly told you they are currently getting away with this .... it would be just your luck that you don't, and I suppose your decision will be based on how lucky you feel, and how you will handle any fraudulent action brought by the lender.

Choice is ultimately yours ... but really I implore you not to go this route no matter how tempting it currently may be.

Hope this helps

Holly