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Why do I need a buy to let mortgage?

Eggcustard1
Eggcustard1 Posts: 3 Newbie
in House buying, renting & selling
Hi, I want to buy a property to rent out as an investment. Why do I need a buy to let mortgage, can't I just get a normal mortgage and rent the rooms out??
Thanks
«13

Comments

  • Jenniefour
    Jenniefour Posts: 1,393 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker Mortgage-free Glee!
    Because buy to let is a separate mortgage market for investors i.e. it's a business. Residential mortgages are for those who will live in the property.
  • ACG
    ACG Posts: 24,712 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Also, if you get a BTL mortgage, that is normally under the assumption that you rent it out to a family rather than renting it out to various people.

    You may find you need a HMO mortgage if you plan on renting the rooms out.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • brit1234
    brit1234 Posts: 5,385 Forumite
    Eggcustard1 wrote: »
    Hi, I want to buy a property to rent out as an investment. Why do I need a buy to let mortgage, can't I just get a normal mortgage and rent the rooms out??
    Thanks

    Because buy to let is a higher risk to the lender so it charges higher fees for that risk. You can get a residential mortgage and rent it out however if you do get a prison sentance maybe any profits you get can cover your prison cost.
    :exclamatiScams - Shared Equity, Shared Ownership, Newbuy, Firstbuy and Help to Buy.

    Save our Savers
  • Eggcustard1
    Eggcustard1 Posts: 3 Newbie
    Thanks, what is HMO mortgage?
  • da_rule
    da_rule Posts: 3,618 Forumite
    Sixth Anniversary 1,000 Posts
    Eggcustard1 wrote: »
    Thanks, what is HMO mortgage?

    It's a type of mortgage for houses in multiple occupation (HMO's). These have a specific legal definition and a different level of risk so there aren't many buy to let mortgages (if any) that allow for a rental property to be run as a HMO.
  • Eggcustard1
    Eggcustard1 Posts: 3 Newbie
    Why? Is it illegal?
  • LdnFtB
    LdnFtB Posts: 100 Forumite
    It's a greater business risk so borrowing money to fund it is more expensive. If you don't understand the basics like this then I don't think you're really a fit person to be a landlord.
  • G_M
    G_M Posts: 51,977 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    edited 10 August 2017 at 1:01AM
    Can I suggest you find a book on property investment? you have a lot to learn before starting this business. Try some of these:
    https://www.amazon.co.uk/property-investment/s?ie=UTF8&page=1&rh=i%3Aaps%2Ck%3Aproperty%20investment

    This post may also help:

    * New landlords: advice, information & links
  • Freecall
    Freecall Posts: 1,337 Forumite
    Part of the Furniture 1,000 Posts Combo Breaker
    Eggcustard1 wrote: »
    Why? Is it illegal?

    Deliberately making a ‘false representation’ for gain is an offence under Section 2 of The Fraud Act 2006.

    Simple as that really.
  • hazyjo
    hazyjo Posts: 15,475 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    I think we're presuming you don't intend to live in the property yourself.

    If you will be living in it and renting rooms out [how many?], please let us know.
    2024 wins: *must start comping again!*
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