Living in a BTL property

holly_hobby

Regulated borrowing essentially means that the lender has to peform due diligence in affordability and status assessments.

BTL finance, is essentially semi-commercial finance (ie as your let property is essentially a business) and is therefore currently unregulated (as it is assumed the individual has obtained independent advice on to suitability etc), and it is not their primary residence but a 2nd/3rd etc supplementary property they hold.

However, given that the the property in question will no longer be involved in your business, but instead will become your primary private residence, BTL finance is no longer suitable nor appropriate (plus you'll be paying a higher rate than you'll obtain on any resi borrowing). To which if you move into the unit without telling the lender and gaining their permission, you are essentially in breach of your mge T&Cs - and upon discovery they can ultimately ask for redemption of the mge (in fact we had a poster on here a yr or so ago, whom found herself in this very position).

So you can see that lenders can and do perform adhoc audit checks, and can and occassionally do follow through any breaches with remedial action - I say this not to frighten you, but just to enable you to make an informed decision about the course of action you may take and how that may affect your position.

Whether you would be picked up in any random audit review is anyone's guess, and if you move in just temporarily and back out again, I can't see too much harm, BUT I wouldn't and couldn't advise you to knowingly breach your t&cs due to the potential fallout.

Hope this helps

Holly xx

silvercar

greencee43 wrote: »

The mortgage is with Mortgage Trust. Has anyone heard of them?

There is also the issue that BTL is unregulated whereas a residential mortgage is regulated; so by telling them they have to acknowledge this.
Silvercar - Forgive my ignorance here but I don't understand how a body that's unregulated needs to be more transparent than one that's not. I thought that those were the types of organisations that didn't have to worry so much about crossing their t's and dotting their i's.

Exactly, as a BTL, you are responsible for making your own mistakes. As a residential mortgage on your home, the lender has a duty of care....responsible lending...treating customers fairly....blah blah.
So the lender should have checked things through more. So by asking to move to a residential mortgage, the lender may feel obliged to start doing affordability checks to make sure you can afford the mortgage. If the answer is that you can't afford it, then they may decline consent and encourage you to continue to let the property.

greencee43

Thanks Holly hobby/Silvercar for clarification on that last point and your advice in general.

I'm not sure what I'm going to do, but at least (as you said HH) I can make an informed decision, either way.

holly_hobby

greencee43 wrote: »

I'm not sure what I'm going to do.

If you are moving in, it should be telling the lender .

pool-hustler

HI

I have a similar problem. I will have to move into my BTL due to now living at my Mothers.

It is Mortgage Express.

I will have to inform them but am worried they'll just find me in breach. They are offloading their loans after all!

I actually want to move location but the rate is 2.64 SVR which is pretty good.

Could I downgrade?
Is this BTL mortgage portable?

holly_hobby

Mortgage borrowings aren't transferrable between properties.

The term porting relates to transferring a mortgage product ie rate eg - tracker, discount, fixed rate, is at the discrection of the lender, and subject to status of the borrower in respect of the new mortgage borrowings.

If you do have to move into a property with a BTL mortgage on it, then strictly yes you do have to inform the lender.

Hope this helps

Holly xx

pool-hustler

holly_hobby wrote: »

Mortgage borrowings aren't transferrable between properties.

The term porting relates to transferring a mortgage product ie rate eg - tracker, discount, fixed rate, is at the discrection of the lender, and subject to status of the borrower in respect of the new mortgage borrowings.

If you do have to move into a property with a BTL mortgage on it, then strictly yes you do have to inform the lender.

Hope this helps

Holly xx

Hi thanks
Does informing them mean they can terminate the agreement? Cos I'm sure they will if they can.

By moving the mortgage to another property, can they refuse and insist i redeem?

Thrugelmir

pool-hustler wrote: »

Hi thanks
Does informing them mean they can terminate the agreement? Cos I'm sure they will if they can.

By moving the mortgage to another property, can they refuse and insist i redeem?

Yes. As you are in breach of contract. If the lender is either no lending or doesn't write residential mortgage business then they have nothing to offer you.

Mortgages are not portable. A new mortgage requires a new application. Which will be subject to current lending policy.

holly_hobby

pool-hustler wrote: »

Hi thanks
Does informing them mean they can terminate the agreement? Cos I'm sure they will if they can.

Yes, if you don't meet their affordabilty criteria, they will ask you to redeem the mortgage.

pool-hustler wrote: »

By moving the mortgage to another property, can they refuse and insist i redeem?

As already advised, mortgages (ie mortgage borrowing) are NOT transferrable between properties - please re-read my original post on what porting relates to.

Holly

Typhoon2000

pool-hustler wrote: »

Hi thanks
Does informing them mean they can terminate the agreement? Cos I'm sure they will if they can.

By moving the mortgage to another property, can they refuse and insist i redeem?

It you tell Mortgage Express you are living in your BTL they will call in the loan.
If you ask they if you can move into your BTL they will say no.
Don't miss a mortgage payment or there is a good chance they will appoint LPA receivers.
It's best not to have any contact with mortgage express, especially telephone contact.
Mortgage Express are not lending any more so there are no new mortgages and no porting of the mortgage product either.