Any way around a buy-to-let mortgage?

shopsalot

Do you have to have a buy to let mortgage to buy to let or can you have a normal mortgage?

Any advice would be welcome

Kez100

The clue is in the question.

shopsalot

Helpful.

I know people who have done it with a different mortgage and insurance - but i was hoping for others who may have had experience.

Mercury1

You could (in theory) get a Residential Mortgage and change over to BTL once the property completes....But why don’t you apply for a BTL in the first place?

It’s not too hard to find a lender for any type of situations these days, as that’s why their in business for

Guy_Montag

It's rather unethical - if you're repo'd & you don't have permission to let your tenants could turn up to their home & find the locks changed & the bailiffs emptying the property.

If you let without the correct insurance you will probably be breaking the law.

Curv

You could always buy the property with a regular mortgage, move in and then apply to the lender for 'consent to lease'.

Most mainstream lenders will give you up to 12 months initially if you give them reasonable grounds for wanting to let the property e.g. moving in with partner but wanting to keep the property in case the relationship doesn't workout. Provided that the mortgage payments are met, you may be allowed to carry on letting indefinitely, subject to periodic reviews by the lender.

The downside, apart from the fact that consent can be withdrawn at any time, is that the lender's CTL policy might also involve removing any fixed or discounted rate, possibly at a cost to the borrower i.e. paying any repayment fees. So may not be cheaper in the long run than a BTL.

silvercar

To apply for a residential mortgage with the intention of letting the property is fraud, obtaining money by deception, penalties include jail, criminal record.......

If you already lived in the property and were now considering letting it out, the situation is different. To breach one of the terms and conditions of your mortgage by letting out a property that was your home on a residential mortgage is "merely" a breach of the terms. Not criminal, the lender if they were minded, could take you to a civil court. Provided the mortgage payments are met that is unlikely to happen.

As far as insurance goes, if you are letting the property then you need to declare this when arranging your building insurance. If you don't you could find that you weren't covered in the event of a claim.

Rover

Mercury1 wrote: »

You could (in theory) get a Residential Mortgage and change over to BTL once the property completes....But why don’t you apply for a BTL in the first place?

It’s not too hard to find a lender for any type of situations these days, as that’s why their in business for

Perhaps, because a BTL mortgage is more expensive than a residential.

shopsalot

Thanks for all the info Guys

SquatNow

Yes lets all commit fraud and go to prison.

Just like all those BTLers who got liar loans to build up their mini-empires will.

Morgage fraud in relation to BTL is what has been pushing the market up since 2005.

The banks recently freaked out when they found out that something like 3/4 of "FTBers" were in fact housewives in their 50s, drunk on property !!!!!!, who had paid off their mortgages a few years ago and had used standard mortgages targeted at FTB to buy property to rent out.

It will all come out in the wash though when the 2 and 3 years fixed rate deals end.

Biggie

also another perspective is that your only allowed to borrow x amount your salary where as most lenders execlude b2let mortages as they're mean't to be self funded (well in theory at least).