SMF - Just Installed!

Residential Mortgage or BTL

Started by Alison, August 07, 2016, 11:02:53 AM

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Alison

I am currently living in forces quarters with my Husband and looking to buy a property to move into in 2-3 years time when he leaves the forces, we obviously want to get the mortgage sorted whilst we are both in full time work.

We have been told by an independent mortgage advisor that we can buy a house with a residential mortgage as this will be our home in the future but looking around on the internet I am nervous of doing this. 

Obviously there is a huge difference both in stamp duty and in the types of mortgage so would prefer a residential mortgage but don't want to go ahead and get burnt later when we are too far into the process.

Any advice on if this is possible would be greatly appreciated.

Hippogriff

What will you be doing with the property in the intervening years?

I'm assuming you are going to let it out, not leave it empty until you want to occupy?

If you apply for a residential mortgage but intend to let the property out this is known as mortgage fraud. I would be interested to know what this Advisor is playing at. You could be blacklisted on the Hunter system.

You say that there is obviously a huge difference in SDLT but I fear you may not understand how this works. There is no difference in SDLT payable on a property depending on whether you let it out or not. The extra SDLT - the 3% kicker - is payable when it is your second property you're buying. You could buy your first property as a BTL and not attract the extra SDLT.

Alison

The last thing I want to do commit mortgage fraud thats why I am uncertain of the advice that I have been given and wanted a second opinion.

We would like to rent the property for 2-3 years, then have somewhere ready to move into a later date.

Hippogriff

A Landlord lets a property. A Tenant rents a property.

Having somewhere ready to move into sounds, somewhat, hopeful - the world is full of tales where Landlords find it a real struggle to get their property back as and when they want.

But, yes, do not commit mortgage fraud. If you're buying a property to let, but having it on a residential mortgage... it's not that hard to see that's not right and, again, I'm very curious what this IFA is up to.

1.618

I may be wrong here, but I think that members of the armed forces are allowed to let out their house without changing from a residential mortgage to a buy-to-let mortgage.
As I say, I could be wrong, so do some googling.

Alison

Thank you, will make some calls tomorrow... will get all the facts before i LET my property!