Living in a BTL property and getting another BTL mortgage

by Readers Question

10:10 AM, 8th August 2016
About 2 years ago

Living in a BTL property and getting another BTL mortgage

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Living in a BTL property and getting another BTL mortgage

A client of mine is currently living in her BTL property due to some circumstantial issues. She can not release her residential mortgage from her old house or switch it to a BTL as the LTV does not stack up. microscope

It’s currently for sale. She wants to buy another BTL property.

Question is can she get another BTL mortgage whist he lives in her BTL house. What questions will a mortgage advisor ask.

Is this possible or not, if so what does she need to do.

Many thanks

Ronnie



Comments

Howard Reuben CeMap CeRER

10:27 AM, 8th August 2016
About 2 years ago

Hi Ronnie

"What questions will a mortgage advisor ask."

We ask all of the questions that the lenders ask, and also some 'compliance' (ie due diligence, money laundering, ID verification etc) questions too.

We are the lenders gatekeepers and we're obliged to find out as much about the potential borrowers personal, residential, financial and asset / liability circumstances as possible.

This does include what mortgages are in place (type, names of borrowers etc) and whether those mortgages are currently fit for purpose.

You have asked "Question is can she get another BTL mortgage whilst she lives in her BTL house?" This can only be answered by her current lender. There is a contract in place (a mortgage is a debt contract, based on specific and mutually agreed terms and conditions) and if she has not told her lender that she is living in a property that she has financed using a BTL mortgage (which of course is based on market rent calculations and specific BTL contract terms) she may be in breach of her mortgage terms.

Before buying another property, she needs to legitimise her current situation if she is indeed residing in her BTL property without consent.

This can be achieved in various ways, however as you allude to above, she will need to speak with a mortgage adviser asap.

Our contact details can be found via our Business Profile link above.

Hope that helps.
Howard Reuben recently posted...Download document library from H D Consultants - Mortgage & Protection | Buy To Let | Colchester

The Property Man

12:48 PM, 8th August 2016
About 2 years ago

This also happened to me. One of my tenants was reported to the police as missing from his family. The police went around to my property were he lives and found him collapsed on the floor in the Livingroom. They smashed down the front door to help the tenant. After speaking with the police they explained to me that it wasn't their fault as they was simply helping my tenant who needed medical attention. It also wasn't the tenants fault also as he didn't just deside one day to collapse !! But it also wasn't my fault (Landlord) !! So who pays ?? The best solution I think and what I done was to go halves with the tenant for replacing the front door and my tenant was happy to do this.

Kate Mellor

10:58 AM, 15th August 2016
About 2 years ago

Ronnie, just to explain, Stephen's answer above is intended for another question on the site and has been typed here accidentally.

With regard to your question, I would have thought she technically COULD get another BTL mortgage if her finances stack up, but with regard to her current situation, as she no doubt is aware she is in breach of her lenders agreement on the BTL as they generally take a dim view of borrowers or their relations living in their BTL properties.

Reading between the lines, I take it she's notified the council, & utilities providers that she is resident in the BTL property, is on the voters register and doesn't still have her details at the house where she has a homeowners mortgage? Also, I assume she doesn't have a tenant in the property which she is selling?

If she is selling the property where she has a homeowners mortgage and is buying a second BTL, where does she intend to live long-term? Is she going to remortgage the property she is currently living in with a homeowners mortgage once she sells up?

If she applies for further BTL borrowing the advisor/new lender will require a list of all properties owned, their approx value, mortgages held and income produced from other BTLs.

I would suggest she sorts out her current situation prior to applying for further borrowing, however if she does want to proceed then she should certainly get a good advisor and take their professional advice. I don't believe she will incur any costs for the initial consultation and as far as I'm aware they are not going to inform her current lender that she is living in her BTL so she will have lost nothing by the consultation. Perhaps Howard Reuben could advise if this is accurate?

Howard Reuben CeMap CeRER

12:00 PM, 15th August 2016
About 2 years ago

Hi Kate, what an excellent reply to add to my own comments.

To respond to "..... she should certainly get a good advisor and take their professional advice. I don’t believe she will incur any costs for the initial consultation and as far as I’m aware they are not going to inform her current lender that she is living in her BTL so she will have lost nothing by the consultation"

We don't charge for initial consultations. We are obliged, however, to report "suspicious" activity. We do work with our 'innocent' Clients to point them in the right direction to resolve any mortgage breaches, and to enable them to move on as speedily as possible to rectify any incongruous issues.

Lenders ask specific questions on their application forms. The answers have to be open, honest, transparent and specific too. Failure to disclose, whether intentionally, deliberately or non-intentionally, is still deemed 'non disclosure' and at first that is always deemed as a deliberate act. It is far better to 'fess up to the current lender, sort out what is required and then move on to arranging further mortgages.

That, is best advice for anyone in such a situation. Anything else is cutting corners and potentially can be considered as mortgage fraud.

There are always the 'yes, buts' people out there, however I am simply stating the right way of doing things and whatever 'other' course of action people may choose to progress is their own considered choice.
Howard Reuben recently posted...HD Consultants Testimonials - Mortgage & Protection | Buy To Let | Colchester

Kate Mellor

14:25 PM, 15th August 2016
About 2 years ago

Reply to the comment left by "Howard Reuben" at "15/08/2016 - 12:00":

Thanks Howard.


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