Mortgage Issues
Discussion
Got a client of mine trying to buy a BTL, cost £160k, loan required £105k, so £55k as the deposit. Initially the mortgage company wanted to confirm that the house was for rental as it was slightly bigger and more expensive than the applicants residential house, they were assured that it was a BTL and that the applicant resides in a house close to his business and some of his family, hence why is house may be cheaper and smaller than the BTL.
Then came question after question, letters about deposits etc etc, all submitted and all happy with.
Today they said they would only lend a lower amount, think it was 30k less, as they don't believe the applicant and so will only lend as if it is a residence. The broker has appealed this and they lender stands firm in their position.
The broker has now said that this will probably be the case will all lenders so he should either take the mortgage or accept that he won't be getting a BTL on this house,
I've never come across this issue before so if anyone has or has any guidance it would be well appreciated,
thanks
Then came question after question, letters about deposits etc etc, all submitted and all happy with.
Today they said they would only lend a lower amount, think it was 30k less, as they don't believe the applicant and so will only lend as if it is a residence. The broker has appealed this and they lender stands firm in their position.
The broker has now said that this will probably be the case will all lenders so he should either take the mortgage or accept that he won't be getting a BTL on this house,
I've never come across this issue before so if anyone has or has any guidance it would be well appreciated,
thanks
zedstar said:
Got a client of mine trying to buy a BTL, cost £160k, loan required £105k, so £55k as the deposit. Initially the mortgage company wanted to confirm that the house was for rental as it was slightly bigger and more expensive than the applicants residential house, they were assured that it was a BTL and that the applicant resides in a house close to his business and some of his family, hence why is house may be cheaper and smaller than the BTL.
Then came question after question, letters about deposits etc etc, all submitted and all happy with.
Today they said they would only lend a lower amount, think it was 30k less, as they don't believe the applicant and so will only lend as if it is a residence. The broker has appealed this and they lender stands firm in their position.
The broker has now said that this will probably be the case will all lenders so he should either take the mortgage or accept that he won't be getting a BTL on this house,
I've never come across this issue before so if anyone has or has any guidance it would be well appreciated,
thanks
Had this exact issue with someone putting an offer in on my place last month, same reasons given...sale fell through. I suspect in my case that they were correct about their suspicions. Then came question after question, letters about deposits etc etc, all submitted and all happy with.
Today they said they would only lend a lower amount, think it was 30k less, as they don't believe the applicant and so will only lend as if it is a residence. The broker has appealed this and they lender stands firm in their position.
The broker has now said that this will probably be the case will all lenders so he should either take the mortgage or accept that he won't be getting a BTL on this house,
I've never come across this issue before so if anyone has or has any guidance it would be well appreciated,
thanks
XJ75 said:
I'm probably missing something obvious, but aren't BTL rates typically higher than residential? I can't work out why anyone would want to buy a residential on a BTL mortgage? Is it something to do with affordability criteria?
Backdoor BTL.Income doesn't fit Residential lending so buy it as a BTL but then live in it. The key indicators to a lender for this are when the BTL is worth more than the applicants Residential property or has more bedrooms Eg why would someone buy a bigger more expensive property than their own, to rent out to others?
In the OP's post, the lender wouldn't have had a problem if the applicants income was sufficient Eg they could buy it as a Residential if they actually wanted but was choosing to buy it as a BTL, as thats what it's intended use is/was.
This is called scheme manipulation and naturally hugely frowned upon...
Ozzie Osmond said:
I've often wondered that myself - particularly since you're much better off having CGT exemption (main residence) on the more expensive property!
It can very easily happen to an accidental landlord who bjys in London to live and then gets a job somewhere cheap. CGT does not dictate everyone's life choices..Similar situation myself.
I rent my primary home, but own another property as BTL. Come remortgage-time the question was why I would own property A, but rent my own home in property B.
Had to prove there was a tenant in situ with tenancy agreement, show my own tenancy agreement as proof of residence etc etc, but it went through. I'm with Metro Bank if that helps
I rent my primary home, but own another property as BTL. Come remortgage-time the question was why I would own property A, but rent my own home in property B.
Had to prove there was a tenant in situ with tenancy agreement, show my own tenancy agreement as proof of residence etc etc, but it went through. I'm with Metro Bank if that helps
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