Switching from residential to buy to let

djhoward

Hi all,

My wife and I (with two kids) are hoping to buy our first property in the next few months, but can only afford a two bed flat. If our circumstances change, can we switch to a buy-to-let mortgage and let our the property? There are a couple circumstances that may occur:

a) We find it's too small for the four of us and decide to rent a 3-bed.
b) We move abroad

Given that we have 30% deposit, would any lenders let us make the switch?

Thanks in advance,

AnotherJoe

"It depends".

Not on your deposit but on your income. Though offhand, if you can subsequently afford to rent a 3 bed house you could get a mortgage on one I'd have thought.

Going abroad, yes quite possibly.

djhoward

Thanks AnotherJoe,

Unfortunately we tried last year to purchase a three bed property but the banks told us we couldn't afford the monthly repayments, even though we pay much more in rent. Looking at the calculations, I'm confident that we'll get a mortgage on a two-bed flat, but we won't want to be there forever.

Thanks again,

AnotherJoe

djhoward wrote: »

Thanks AnotherJoe,

Unfortunately we tried last year to purchase a three bed property but the banks told us we couldn't afford the monthly repayments, even though we pay much more in rent. Looking at the calculations, I'm confident that we'll get a mortgage on a two-bed flat, but we won't want to be there forever.

Thanks again,

You did say "if circumstances changed" by which i thought you meant got additional income to make a 3 bed possible.
I think you'd be on very dodgy grounds, if you cannot afford to buy a 3 bed, to let out your 2 bed and take on rental for a 3 bed, what happens if your tenant stops paying the rent, now you've got to cover a mortgage and rental for the six months or longer it takes to evict them.

Arklight

If I were you I would overpay the mortgage as fast as you can and trade up.


You don't say how old your kids are but a 2 bed flat, unless unusually large in some way, is not ideal for a family of 4.

djhoward

Good point, I see what you mean about the risk. There is a chance that our income will increase (my wife should be able to go back to work in a couple of years). So maybe we should just hold out until then.