Buy-to-let with the ability to live in?

ccoplestone

Hello there,

First time buyer with a query here! I'm looking to mortgage my first property in the coming few months, possibility early next year and I have read online that buy-to-let mortgages are pretty much set in stone, strictly as what they say on the tin... 'buy to let'. I have read the occasional post which states that in some cases you could come to an agreement with the lender whereby you actually can live it in. Not too sure how true that is, however.

My situation is basically this; I would like to get a buy-to-let mortgage and rent the property out for around 18 months, at which point I would be ready to move in myself.

Any information would be greatly appreciate.

ACG

You could get a BTL Mortgage with no early repayment charges and then in 18 months remortgage to a residential Mortgage.

I do not think any BTL mortgages allow you to live in the property, happy to be proven wrong however.

ccoplestone

ACG wrote: »

You could get a BTL Mortgage with no early repayment charges and then in 18 months remortgage to a residential Mortgage.

I do not think any BTL mortgages allow you to live in the property, happy to be proven wrong however.

I see, that does make sense. excuse my ignorance as I'm new to this game. What are no early repayment charges on a mortgage?

Thanks for your guidance.

ACG

Most mortgages have a minimum tie in period, typically that is 2 years. If you redeem the mortgage (by selling the property or remortgaging elsewhere) you would incur early repayment charges, that is typically 2% in the first year, 1% in the second year.

So if you remortgage after 18 months on to a normal residential mortgage, you may find some mortgages charge you a fee.

Owain_Moneysaver

ccoplestone wrote: »

My situation is basically this; I would like to get a buy-to-let mortgage and rent the property out for around 18 months, at which point I would be ready to move in myself.

Although at which point the tenants might not be willing to move out until you've gone to court, got a possession order and then got the bailiffs in, and then you find they've trashed the place.

Can you afford to carry on paying the mortgage and other expenses even if the tenants default on the rent?

ccoplestone

Owain_Moneysaver wrote: »

Although at which point the tenants might not be willing to move out until you've gone to court, got a possession order and then got the bailiffs in, and then you find they've trashed the place.

Can you afford to carry on paying the mortgage and other expenses even if the tenants default on the rent?

I suppose it's an unavoidable potential situation the modern day homeowner has... I do agree on it being a tough decision to make.

I could afford the repayments should that be the case but be this the case, it could take a very long time to get the tenants out. And as you said, trash the place.. Yay.

ccoplestone

ACG wrote: »

Most mortgages have a minimum tie in period, typically that is 2 years. If you redeem the mortgage (by selling the property or remortgaging elsewhere) you would incur early repayment charges, that is typically 2% in the first year, 1% in the second year.

So if you remortgage after 18 months on to a normal residential mortgage, you may find some mortgages charge you a fee.

I see. Something I would imagine is quite common. I suppose it would be a case of scouting what lenders have to offer.

Thanks for your input, much appreciated.

ACG

There are not many lenders who do no ERCs on BTLs, I think there is only one on the high street. Most BTLs are typically done through a broker, if you are narrowing down your options significantly with a requirement like no ERCs, you may find a broker is needed.

But no harm in looking yourself first.

AnotherJoe

Or just move in after 2 years when you remortgage.

foxy-stoat

Just use the 18 months to save more money for the deposit and buy when you are ready.

ccoplestone

Thanks for all of the replies.

So ultimately, with all things considered, would the majority agree that mortgaging a property for 18 months - 2 years on a no ERC BTL mortgage to earn some extra money from rent in that time and then remortgaging to a residential when I am ready to move in, not worth it?

As a side query - could I not set a term at which tenants are living in the property?