Moving into our Buy to let and paying off its mortgage - Question

Jumblebumble

AdrianC said:

janzbro said:

I was thinking there maybe some sort of cap gains tax or gods knows what else as we are moving back to the BTL 

It's just a house you own. No more, no less.

If you rent it out, you pay tax on the income.
When you buy it, you pay SDLT - and if you own other houses, you may pay more.
When you sell it, if you haven't live in it, you may pay CGT.

If you have a mortgage, your lender may insist on you living there - or may insist on you not living there, depending on the type of mortgage.

Apart from that, that's IT.

If the OP does not tell the Mortgage company they will not be insisting on anything
My experience although I am not giving advice is that all a BTL mortgage company are really interested in is that you are making the repayments and how you are going to repay the mortgage. They are not concerned with much else

janzbro

HI, tell the mortgage company what exactly - we are just paying off the mortgage in full, once that is done then surely its ours to live in if we choose to do so.  

AdrianC

janzbro said:

HI, tell the mortgage company what exactly - we are just paying off the mortgage in full, once that is done then surely its ours to live in if we choose to do so.  

It was "yours in full" from the moment you completed on the purchase.

But, of course, you owed somebody quite a lot of money for helping you to do that. And that money came with a pile of Ts & Cs. If you failed to abide by them, then the lender would be well within their rights to ask for the money back sharpish...

"Well, if I don't tell them, they'll never find out" is a mug's game.

davidmcn

AdrianC said:

janzbro said:

HI, tell the mortgage company what exactly - we are just paying off the mortgage in full, once that is done then surely its ours to live in if we choose to do so.  

If you failed to abide by them, then the lender would be well within their rights to ask for the money back sharpish...

Yes, but in this case the OP is handing the money back anyway!

AdrianC

davidmcn said:

AdrianC said:

If you failed to abide by them, then the lender would be well within their rights to ask for the money back sharpish...

Yes, but in this case the OP is handing the money back anyway!

...exactly...

janzbro

Sorry Adrian I dont see the point you are trying to make - they are getting the money back "sharpish" as I will be paying the mortgage off once we recieve funds from the sale of our home. We did discuss changing the mortgage from a BTL to a residential mortgage but since the offer we would have enough equity in our current home to pay off the balance of the rental. 

janzbro

we are aware it is against the terms to reside in a BTL property and we were going to change it to a residential mortgage but as we are "paying it off" would it matter - PS we would not be moving into the rental until the mortgage is paid and it is currently vacant.
What is the point of changing to a residential mortgage to only then pay it off.
Also due to me losing my job and being in arrears on various credit cards loans etc our credit rating has/is going down the toilet and eligibility for a mortgage may be a problem.

We are trying to make the best out of a bad situation, we have enough equity but poor credit at this time, once the sale goes through we should have enough to settle all our debts and mortgages but its tight.

AdrianC

janzbro said:

Sorry Adrian I dont see the point you are trying to make - they are getting the money back "sharpish" as I will be paying the mortgage off once we recieve funds from the sale of our home. We did discuss changing the mortgage from a BTL to a residential mortgage but since the offer we would have enough equity in our current home to pay off the balance of the rental. 

Yes, so since there won't be a lender, their opinion will be no longer relevant.

However Jumble's advice lived up to their name, and the hypothetical lender they referred do most certainly COULD insist. BtL lenders really don't like situations where they think somebody is using them as a backdoor to living somewhere nobody would lend them money on normally.

janzbro

thats fair enough, I wanted to do things correctly and never considered moving in and hiding it from the lender. We just want to move on with our lives but not break any rules doing so.

Thanks to all those that helped answer my questions and to the others why bother replying if all your going to do is make snide comments.

dimbo61

Nothing wrong with you moving back to your old home provided you clear the BTL mortgage first.
You will have to pay the selling costs and legal costs to sell your current home and clear the BTL mortgage but you don't have any stamp duty to pay nor capital gains tax Yet ?