Can I let my home if I have a residential mortgage?

When you buy a house, you need to decide if you will live in it or if you have the intention of letting it out.

You must declare the truth as otherwise you might end up with the incorrect mortgage type or worse, in breach of a mortgage agreement and in big trouble!

In general, a residential mortgage means you have to live in the property and a buy to let mortgage means you should not live in there but others can rent it from you.

Can you let your home if it is on a residential mortgage then?!

Yes, there are ways to do this, but it will depend on some specific aspects of your case!

First of all, it will depend on whether your current lender can give you a consent to let. You have to ask for this and not just assume that the lender will be fine with you moving out and letting other people live in the house!

Secondly, if you have got lender’s consent, you must let your home insurance provider know as your policy could go void if you don’t.

If you live on your own and have a spare bedroom, there may be an option to let it to a lodger. There are lenders that will allow you to let to a lodger but some lenders won’t, so you need to ask the lender for permission and, as above, let the insurance firm know. There are certain rules around having lodgers so look out for another article on this.

Finally, if you know you need to permanently move out of your residential house, then best look into transferring a residential mortgage into a buy to let one or to carry out a let to buy transaction. Whether you qualify to do this may be dependent upon many things so one thing you should do before you take any other steps is to speak to a broker!

We encourage you to listen to an adviser rather than a neighbour, friend or other people who may not be suitably qualified to give advice. They may have some experiences, but these may not necessarily reflect what lenders allow. If you want to do things right, book an appointment with a broker.

If you have any questions, do not hesitate to contact us.

Don't DIY!

The Internet is a very powerful and helpful tool when it comes to many things in life. More and more lenders offer online calculations, quick decisions in principles and quoting systems so what could go wrong if you wanted to sort out your mortgage this way?!

In many cases it may be possible to get an online indication of a mortgage affordability or to check interest rates but, unless you wish to take all responsibility for any issues in the application process, and, unless you are absolutely sure you have a thorough understanding of lenders’ requirements and criteria, you may get a very unpleasant surprise and not quite the outcome you want.

Buying a house is a serious financial transaction and perhaps best to leave this to a qualified advisor to deal with the mortgage application.

By doing your mortgage application yourself, you might end up with a more expensive rate, you might lose money and time by going for the incorrect lender and getting declined, you might damage your credit score and finally you might completely jeopardise your purchase.

You would probably not extract your own tooth as certain things be best left to professionals;)

Nowadays when lenders keep changing criteria and when nothing is guaranteed to not change unexpectedly, it is too much of a gamble to Do It Yourself.

If you have any mortgage related enquiries, do get in touch and we will be happy to help.

I have made an offer and it’s been accepted – what do I do next?!!!

Buying a house is surely something that we plan well in advance rather than a spontaneous shopping spree.

Of course, one can browse through properties online but, to make an offer, one should at least first have a consultation with a broker to know how much they can afford to borrow, to check their credit report and to know that their deposit is enough.

These are all individual factors that need to be taken into consideration before making an offer. Having no time to discuss your purchase is a very poor excuse which can cost you not only losing a dream home but can give you lots of stress and disappointment.

More often than not, estate agents want to see us as serious buyers who are prepared in advance and they expect us to present them with a decision in principle document on making an offer.

Best leave the preparation stage to a professional rather than DIY this step as you may harm your credit score and have no gain anyway. A broker knows all lenders and their criteria and will carefully select the one that meets your needs.

As market is very busy, there is lots of competitive buyers who may have already seen a broker and who are better prepared. Be one of them, be wise!

If you wish to discuss your circumstances in preparation for buying, feel free to contact us.