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Issues buying privately and using as a BTL
Newheight13
Posts: 246 Forumite
Quick question,
Why do mortgage lenders have an issue when buying privately ( even at market value) if using for property as a BTL?
Why do mortgage lenders have an issue when buying privately ( even at market value) if using for property as a BTL?
Thanks
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Comments
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What issues are you having?0
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Lots of t’s&c’s stating the below when buy a property as a BTL.
- Inter-family sales are unacceptable, this includes in-laws, cousins, ex-partners.
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A BTL is a completely different product to a residential mortgage.
BTL mortgages are lent based on the rent you will get and not your personal affordability so if you don't rent it out then the lender risks the mortgage not being paid.
BTLs are not regulated but if you plan to rent it to family they are supposed to be. That and people are less likely to treat it as a business if family live there so more risk to the lender.
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OP is asking about buying from family to rent out as a BTL, not to rent to family.housebuyer143 said:A BTL is a completely different product to a residential mortgage.
BTL mortgages are lent based on the rent you will get and not your personal affordability so if you don't rent it out then the lender risks the mortgage not being paid.
BTLs are not regulated but if you plan to rent it to family they are supposed to be. That and people are less likely to treat it as a business if family live there so more risk to the lender.
I guess the lender is worried about whether the family will move out or whether they will stay as tenants, whether the price is genuine market price (though a valuation could check on that), whether this is a tax avoidance deal to keep a property within the family without any money changing hands, whether it is just done for a family unit to borrow money on the cheap rather than a re-mortgage deal, or whether it is being done to justify the mortgage where a salary isn't secure or high enough to warrant the mortgage.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.2 -
So this isn't just a private sale with no agent, but the vendor and purchaser are connected?I am a mortgage broker. 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. Please do not send PMs asking for one-to-one-advice, or representation.0
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There are Lenders other than The Mortgage Works - consult a Mortgage BrokerI am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, 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.0 -
You're all wrong. The OP is wanting to buy a property through a residential mortgage and letting it out privately.
Well frankly speaking you won't get the mortgage and if you do, it's probably because you lied which is fraud. Okay I'll refrain from posting from now on.0 -
A lot of lenders do have this policy... And a lot don't. A mortgage broker will be able to help navigate
My opinion is that lenders are wary of it being a Sale and Rent Back operation which are highly highly regulated0 -
Thank you all. Just to clarify. The owner leaves abroad and has done for 20 years and has let it out but just wants rid of it now.0
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Wow! That's a leap. Proved totally incorrect by the OP's clarification.alanyau88 said:You're all wrong. The OP is wanting to buy a property through a residential mortgage and letting it out privately.
Well frankly speaking you won't get the mortgage and if you do, it's probably because you lied which is fraud. Okay I'll refrain from posting from now on.I am a mortgage broker. 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. Please do not send PMs asking for one-to-one-advice, or representation.1
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