Getting CTL approval before completing mortgage

mortgagewoes

Am applying for a mortgage with TSB through London & Country, and am running up against a serious block.

My wife works in a boarding school, and as such we are provided with accommodation as part of her employment.

We wanted to buy a house to get on the ladder, and rent it out while we're in school accommodation.

L&C advised before application that we would be able to get a regular residential mortgage with TSB (rather than a BTL mortgage at a higher rate) who would be willing to give consent to let (CTL) from day one of the mortgage, with the mortgage remaining at a residential rate. This is because they allow a policy exemption (from the normal requirement to have had mortgage for 6 months before CTL) for customers in "tied accommodation".

This sounded great, so we went with it. Valuation done, mortgage offer through. Mortgage offer makes no mention of CTL, so I then go back to broker and say "OK, all we need now is something in writing from TSB saying they'll give us CTL from day one".

Broker talks to the TSB business development manager (BDM). BDM says that they can't confirm this in writing specifically for us, but can only quote the policy, which says:

Tied Housing
Customers residing in tied housing (E.g. Members of the clergy, country estate workers) who wish to purchase a property to eventually live in can select from the residential range of products and CTL can be granted for 3 years on their residential product. If they then wish to continue letting after this initial period of CTL expires, the customer must then re-apply for CTL and take a CTL product.

The requirement to have had a residential mortgage in place for six months prior to qualifying for CTL does not apply in this instance as under this arrangement it is accepted that the property will be let from the completion of this initial product.

I'm not happy with this for a couple of reasons. First, the wording here, e.g. "CTL can be granted..." is too indefinite, and doesn't stop them from refusing CTL. Second, there's always the possibility that the exact accommodation we're in wouldn't qualify as "tied housing" in TSB's estimation - and they could always turn round and say that "boarding school teacher" isn't one of our examples.

Broker then advises I contact the CTL application team at TSB. So I eventually get through to their CTL person ("CTL Guy"), who said he was "the only person in the company who deals with CTL applications". And guess what? CTL Guy has never heard of the exemption to the 6-month rule except for Armed Forces personnel.

I go back to broker and tell him to tell BDM to call her colleague the CTL Guy, but days later and nothing's happened. I'm badgering the broker all he says is "I've called them and emailed them - there's nothing more I can do".

I'm now banging my head against a brick wall, about to lose the house we're wanting to buy because the vendor wants to complete in 10 days time!

Any thoughts or advice?

I have thought about just going ahead with the mortgage without CTL. But the risk is that they could then refuse it, and worst case scenario we would have to sell up, and therefore be down early repayment charges (£12k+), as well as stamp duty, other costs, and mortgage repayments while we wait for house to sell.

Stress!

silvercar

I have thought about just going ahead with the mortgage without CTL. But the risk is that they could then refuse it, and worst case scenario we would have to sell up, and therefore be down early repayment charges (£12k+), as well as stamp duty, other costs, and mortgage repayments while we wait for house to sell.

The risk is they won't let you let it straight away and insist on waiting 6 months, so you are 6 months with no rent coming in.

mortgagewoes

silvercar wrote: »

The risk is they won't let you let it straight away and insist on waiting 6 months, so you are 6 months with no rent coming in.

But surely the bigger risk is them saying no CTL at all? Then we'd have no choice but to sell the house.

Let_Us_See

Perhaps you should remind L & C there are other lenders who will consider CTL for applicants with tied accommodation.

At the end of the day you either go down the BTL route or accept TSB's, or any other lender's, terms and conditions.

Prothet_of_Doom

You are using a broker for what reason? Is he getting commission on completion ? Tell him to !!!!ing sort it, or you'll find someone that will, and let them EARN their commission/fee/bonus/etc.
Then, i'd phone my solicitor and ask him to get confirmation in writing from the lender, who he is also representing don't forget, because this was promised on day one, otherwise you'll have to look again at the whole financing of it, and that will mean a delay or even the whole sorry chain falling through. (I take it you are at the bottom of a chain ?)