Residential Mortgage

paulsally47

Hi,

We stayed at a B&B and because we're looking at buying at the moment the thought had crossed our mind of having a B&B (living in it and making money from the other rooms). We asked advice from the owner (they have 10 rooms) how they did it. He 'openly' said he bought the property 3 years ago on a residential mortgage so he had only put down 10% instead of 40% and that's the best way to do it. He also said that's how most the B&B owners do it because in his words "who could afford to put a large deposit down nowadays".

Any thoughts on this please....?

ACG

If he gets found out, the mortgage could be recalled. Not having enough equity in the property presumably to remortgage on to a commercial mortgage means he/she would likely end up having to sell. They then lose their home and income.

Its a very risky business model.

paulsally47

How would they get found out?

ACG

Does it matter?

amnblog

It's not difficult to spot a property operating as a B&B.

davidmcn

paulsally47 wrote: »

How would they get found out?

For new applications, what are they going to declare as their source of income?

Thrugelmir

paulsally47 wrote: »

How would they get found out?

Little point in starting a long term business venture knowing that at any point of time that everything you've worked for becomes worthless. As I've often written financial relationships are built on trust. Not just credit scores. The fact that someone is prepared to lie. Says a more about the individual concerned than words will ever say. Once black marked it's hard to lose the reputation.