Buy to let mortgage or 1st time residential mortgage?

abds660

Hello.

I'm looking to buy my first property. The main problem is that my application for a mortgage is likely to be as a sole applicant in London. I have modest earnings - 25-35k and properties around even the outskirts of London are expensive.

My question is - is it easier to get a buy to let mortgage than it is a normal residential, first-time buyer mortgage? For example, if I were looking to get a property in the region of £400,000 with a 25% deposit on a buy to let mortgage, the rental value of a property in London is easily going to cover the cost of even an expensive mortgage, I would have thought? Or does the lender still take my earnings into account as one of the main factors?

Any help/advice appreciated! Thanks.

Yorkie1

You are going to find it very difficult to find a BTL mortgage without owning your own property first. Lenders are wise to the ruse of people trying to get a residential property through the back door of a BTL product.

ACG

They have completely different purposes.
Do you want a property to live in or rent out?

If you want it to live in realistically your only not going to get a mortgage of £300k - more like half that.

If you want it to rent out then:
1) Most lenders will want to see an income, but not all of them.
2) Most lenders will want you to be a homeowner but not all of them.
Trying to combine the 2 is going to be difficult.

But you first need to decide whether you intend to live in or not.

GMS

First time buyer and first time landlord is not a good combination. Lenders are wise to back door residentials and may want you to prove you could get a residential mortgage if applying for a BTL.

As has been said are you planning to live in it or let it out?

abds660

Ideally I would want to live there. But I read that if I were to be living there then I know I can't rent the property out to myself. What would the situation be if I were to rent it to a friend and live there too - or is that not allowed either?

Is the situation any easier if the mortgage and property are in a family members name and it is rented out to myself and a friend?

mlp

Is the situation any easier if the mortgage and property are in a family members name and it is rented out to myself and a friend?

They're wise to that as well... you normally can't use a BTL mortgage and then rent to a family member.

GMS

You are looking for help to defraud a mortgage lender. Be careful of what you do as the repurcussions could be huge.

Not sure as to what you mean by wanting to buy a property and rent it to yourself. Can only assume part of your crazy scheme.

silvercar

What would the situation be if I were to rent it to a friend and live there too - or is that not allowed either?

So you want to be the sub-tenant of your friend, who is renting off you. Making your friend a tenant living in the same property as the landlord ie a lodger.

Obviously that won't work because the tenancy won't be an AST and most BTL mortgages require the property to be let on an AST.

Is the situation any easier if the mortgage and property are in a family members name and it is rented out to myself and a friend?

Most BTL mortgages don't allow this.

amnblog

Lenders are wise to applicants trying to pass a residential purchase off as a buy to let.


Any broker that helps you do this is an idiot as they may find themselves removed from one of more Lender's panels.


If you have £100,000 to invest in a home look at shared ownership.

ACG

You cant live in the property if it is a BTL under ANY circumstances. Dont try to be clever and think of a technicality - there isnt one.

What would you do if the lender found out and called in the mortgage?

Realistically I cant see this going through even if you find a lender who will lend to first time buyers on BTLs. They are going to have a mountain of questions on why you are buying it and then probably doubt you anyway and decline.