Buy-to-let (parents live there) advice

NiceGuySteady

My second house is coming up for mortgage renewal. Currently I let my parents live there, just paying the interest on an interest-only "buy to let" mortgage (so well below market value). I don't even know if this is strictly permissable. Anyway, in the interests of doing things above board from now on, does anyone know of a lender that provides mortgages for this type of scenario? Also, I wonder about the merits of paying a little more from now on, to start tackling the capital as well as the interest. Any and all advice welcomed with open ears. Many thanks.

Neutrinno

Yes, Virgin will consider regulated BTL's on a repayment basis up to 75% LTV I believe with parents living in there.

AnotherJoe

You could just overpay on the current mortgage.

kingstreet

ImRob wrote: »

Yes, Virgin will consider regulated BTL's on a repayment basis up to 70% LTV I believe with parents living in there.

From VM criteria;-

We consider both BTL and CBTL business to be a property that is occupied under a rental agreement and where there is no intention for the borrower or family member to reside.

https://intermediaries.virginmoney.com/virgin/lending-policy/find-articles-a-z/index.jsp?range=ab

Neutrinno

@Kingstreet - also from VM critera (this will be a RBTL):

Letting to a Family Member (Regulated Buy to Let) hide
Although Buy to Let mortgages are not regulated, scenarios where the tenant of the property is the customer's immediate family (e.g. parent, grandparent, child, grandchild, brother, sister) are regarded as regulated loans therefore they must proceed on a standard residential product.

The following restrictions must be met:

Maximum LTV 75%
Affordability will be assessed as per residential lending policy. The customer must be able to afford the repayments (including any other mortgage payments) without taking into account any rent received Repayment vehicles for Interest Only mortgages must follow residential lending policy

(I can't post the link due to being a new user sorry, but it's on the same critera page)

kingstreet

I see where you're coming from but it's oranges and apples, not Bramley's and Cox's.

It's based on residential lending policy not BTL policy, so it's a second property for family occupation not a regulated BTL.

VM does not consider regulated BTLs and it's important that future readers don't misunderstand that.

Neutrinno

kingstreet wrote: »

I see where you're coming from but it's oranges and apples, not Bramley's and Cox's.

It's based on residential lending policy not BTL policy, so it's a second property for family occupation not a regulated BTL.

VM does not consider regulated BTLs and it's important that future readers don't misunderstand that.

Virgin do consider regulated buy to lets, infact the criteria I've quoted above is even under the title "Letting to a Family Member (Regulated Buy to Let". I've personally dealt with an identical case to this last week, and can confirm Virgin do consider this as a RBTL via residential policy and products.

I'm not sure what your point is in all of this, please double check their criteria before posting wrong information.

kingstreet

Er... okay.

I'll consider myself duly corrected.

amnblog

I think the key point is that RBTL's 'are regarded as regulated loans therefore they must proceed on a standard residential product.'

Forum viewers should be aware that this does not mean these deals will be underwritten on BTL criteria (i.e. rental income as affordability)

Neutrinno

amnblog wrote: »

I think the key point is that RBTL's 'are regarded as regulated loans therefore they must proceed on a standard residential product.'

Forum viewers should be aware that this does not mean these deals will be underwritten on BTL criteria (i.e. rental income as affordability)

Yes that is correct, I'm not sure how this has tailed off so much from the OP's question on which lenders would consider his current situation