buying to let without buy to let mortgage?

ktuludays

Can i buy a property to rent out without a buy to let mortgage?

I am a first time buyer and have a house that i rent from my employer.

I want a house simply to have an investment and a house for the future when my contract expires.

as i intend to live in the house in the future can i do this without a buy to let mortgage?

cheers

rob

dunstonh

Can i buy a property to rent out without a buy to let mortgage?

Yes.

I want a house simply to have an investment and a house for the future when my contract expires.

Good idea but maybe not the time to be considering it with property prices falling and rental yields low (when rental yields on property fall below cash rates then its a sign not to buy).

ktuludays

i wasn't looking at doing it now. it was so i could plan ahead a bit.

would i have to tell the lender that i was going to let it straight away?

Imp

You don't need a Buy to Let mortgage to buy a rental property, you could use cash.

If you buy it with the intention to rent it out, and don't have cash, you need a Buy to Let mortgage. If you get an owner occupier mortgage without any intention of occupying the property, you could be in danger of committing fraud. Then you could get a few more years rent free accomodation.

ktuludays

is there a period of time that i can live in the property before i could then legally rent it out?

Leon_W

It all depends on the lender.

On a residential mortgage application it always asks the question "Do you intend to live in the property ?" Now, if you say NO then the lender will dismiss your application out of hand as it isn't a residential mortgage and tell you to take a hike.

If you say YES, that it is your intention to live in the property, then the lender knows no different so the application can proceed. As you are aware, there is a requirement which will be written into the mortgage contract that if you intend on letting the property out that you have to inform them. On this information they can take one of several options. Give you the OK at the same rate. Give you the OK at the same rate and charge a fee. Give you the OK, charge a fee and increase your rate. Say no and call in the loan.

Calling in the loan is unlikely ,but if I were the lender and you told me, say a day after the mortgage completed, that you wanted to let the property out I would be under the impression that your original intention was to let the property all along and I would be inclined to charge you a fee and increase your rate (It is afterall, you that had broken the original contract)

You are much better to take a proper Buy To Let mortgage in my view as it's all above board. Telling porky pies could drop you right in it and left at the whim of a lender whether to charge you whatever they liked or not.

Regards

ktuludays

some excellent replies thanks

however i reckon my situation is a little different to the norm as i already have a house with my job. a buy to let mortgage has an extremely high deposit requirement and these mortgages are normally used on a second property to make money.

as my situation differs do you think there may be a little discretion on the lenders behalf or am i wasting my time with them. if push to comes to shove i will buy to live and then after 6 months,1 year rent it out.

toonfish

All you need to ensure is that you choose a lender that will consent to you letting if/when you change your mind, preferably on the existing deal. By buying on a residential mortgage you will possibly also get away with a smaller deposit although this loan will be less likely to be fully covered by any rent.