Can I rent-out property subj. to non-BTL mortgage?

[lotus69]

I have recently been made redundant & recieved a payoff from my ex employer, I currently live at home with my parents & I was wondering if I can purchase a property with a normal mortgage using say a 5% deposit as opposed to a buy to let mortgage & start renting it out virtually straight away ?

I have just read on the site themovechannel.com that " I can't do this as letting your property is usually against the terms of your mortgage agreement. Lenders take a dim view of people who let out their property without permission and can even end up serving you notice on the property"

Is this true ?

I have many friends who within the last couple of years have have purchased their first house on there own & since met a partner who they have moved in with, then put there houses up for rent, first purchasing them I would think using a normal mortgage, so isn't this the same thing I am wanting to do in effect ?

I would really appreciate any advice on this as I am wanting to make an investment first using a normal mortgage before buying my own house next & I am trying to avoid getting a buy to let mortgage & paying a 15 -20 % deposit for the first investment.

I am new to all this & would greatly appreciate any help whatsoever.

Thanks

[Jonboy]

i'll probably get slammed for saying this but :D

yes, you would more than likely get away with it, i know people who do it, in fact i know people with a few properties bought on the basis they are going to live there and then suddenly don't, probably because they have 5 other houses they are still thinking about living in!

they get post at the house from mortgage co. etc

i suppose they work on the basis that the mortgage company are very unlikely to want to pop over for a cup of tea once you havce bought the place!

the one person you deffo should not deceive is the insurance company, as if the place burns down and the firebrigade turn up get a statement from the 'tenants' if won't take them long to work out they don't have to pay out!

what you have to remember is that the mortgage on 95%LTV will be a lot higher, so you'll have to make sure your figures stack up if you do do it, which i'm not reccomending that you do, just saying if you did do it. (my ar*e neatly covered)

[Yingtan]

You could also get whats know as a "consent to let " from your mortgage lender. This way everyone is in the know, and you have achieved your goal.

[susan 2]

The easy way is to buy a property with a normal mortgage, live in it yourself, and rent a couple of rooms, under the rent a room scheme for a year or so until you have enough money to get a BTL. My son did this for two years, then informed the mortgage company he wanted to turn it into BTL which they were happy to do. He then went and bought another house for himself and did the same thing again. He did inform his insurance company what he was doing and they did charge him slightly more, but not much. I agree with Jonboy that is essential.

[lotus69]

Thanks for the really helpful advice, much appreciated.

[Sheila Harmon]

Hi there! Have read your mail. I am an investor and have invested in properties using a buy to let mortgage. As you are a first time buyer, I would go ahead and buy a property with a normal first time buyer mortgage - you can get 95% mortgages on first time buyer properties. The building societies don't like it if you let it out, but if you tell them that is what you are doing when the time comes, then they just put your mortgage rate up about 0.5% If you don't tell them, you are violating their terms and conditions and this can have an effect on your tenants so it really is best to come clean and let them know what you are doing. I know there are a lot of people who don't bother and just let their houses out but honesty really is the best policy! Agents also won't take your property on to manage it if they know you haven't informed your mortgage lender, so there are repercussions! I would go ahead with a normal mortgage if I were you and when you're ready to let it out, then either tell your mortgage lender or remortgage to a buy to let mortgage if you are in a position to do so. Hope this helps. Kind regards.










I have recently been made redundant & recieved a payoff from my ex employer, I currently live at home with my parents & I was wondering if I can purchase a property with a normal mortgage using say a 5% deposit as opposed to a buy to let mortgage & start renting it out virtually straight away ?

I have just read on the site themovechannel.com that " I can't do this as letting your property is usually against the terms of your mortgage agreement. Lenders take a dim view of people who let out their property without permission and can even end up serving you notice on the property"

Is this true ?

I have many friends who within the last couple of years have have purchased their first house on there own & since met a partner who they have moved in with, then put there houses up for rent, first purchasing them I would think using a normal mortgage, so isn't this the same thing I am wanting to do in effect ?

I would really appreciate any advice on this as I am wanting to make an investment first using a normal mortgage before buying my own house next & I am trying to avoid getting a buy to let mortgage & paying a 15 -20 % deposit for the first investment.

I am new to all this & would greatly appreciate any help whatsoever.

Thanks

[pete]

Hi Lotus,
I would agree with Sheila. I have done as you (my brother is a mortgage broker) and he has arranged many mortgages for investors and has a few properties on buy to let. Initially I started as you are proposing and it worked well - honesty is the best policy as there are many ways that lenders can inadvertently discover you are not residing there (eg their letters being sent back to them by your tenants for one). If you are proposing to let privately (without agents) then the discovery likelihood becomes less as one can collect mail monthly with rent (I have found - unless you find a good one - that some agents take your money and tenants money but do not live up to your expectations - want money for things you are probably able to do as well for yourself if you live in the locality). You can have proper credit checks done on propective tenants prior to renting. Incidentally my brother could probably give you better advice on renting and mortgages than I.
Good luck with your venture, anyway.
best wishes
peter

[Jonboy]

your right pete many agents are very bad, in some cases criminal in my opinion. i know i am one (agent that is not criminal):D

but you are talking about full property management, you can instruct an agent on tenant finding only and then you still look after the property, collect the rent (and mail if needed)

good luck with your new venture lotus