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Killer Bunny

Btl Mortgages Used For Owner Occupation

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Anyone got links or evidence? Major media person seeks to do piece on it.

Only that a friend of mine got a BTL mortgage from Chelsea building society to buy his Mothers house (his share of inheritance was his deposit) in Romford. Paid about £320k which was top whack back then (around 2007/8)

Was supposed to get an AST setup as condition of mortgage, so was looking for a virtual tenant. He is living there himself but now has lodgers.

One lodger at £500/600 pcm just about paid for the whole place as the mortgage was incredibly cheap (less than £300 pcm) but that might have been a teaser rate

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I do not know of anyone, but post-MMR this was inevitable. BTL mortgages are unregulated and checks are lower.

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I do not know of anyone, but post-MMR this was inevitable. BTL mortgages are unregulated and checks are lower.

Thank you for answering a question I was about to ask.

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Anyone got links or evidence? Major media person seeks to do piece on it.

Surely their best bet would be to posse as a buyer ,i`m sure there are plenty of independent mortgage brokers hanging about estate agents that would be more than willing to help out

I know one personally and they have confirmed it is the new liar loan, they seem to be working on the premiss that there was no come backs the first time around so there won`t be this time around and IMO they will be proved to be right

Edited by long time lurking

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No hard evidence but I do have a friend who was advised to purchase a new build with a BTL mortgage. Then after completion advise the mortgage company that they had deicided to live in it themselves rather than let it out.

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No hard evidence but I do have a friend who was advised to purchase a new build with a BTL mortgage. Then after completion advise the mortgage company that they had deicided to live in it themselves rather than let it out.

Hmm. I wonder if any mortgage lenders would, if faced with this situation, would call for the mortgage to be repaid? :unsure: After all, that wasn't the original terms of the application.

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Most lenders require that you already have a mortgage / house before letting you take out a buy-to-bet mortgage.

You're the second person I heard this from. If BTL is supposed to be a business, what comparable business requires you to have a residential mortgage first?

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Most lenders require that you already have a mortgage / house before letting you take out a buy-to-bet mortgage.

I`m lead to believe the standard way around this is another twist on the bank of mum and dad they have the mortgage in their name then the mortgage payments are paid to them in the way of rent (comes in handy if they become unemployed too)

There are going to be a few worried parents out there if they read about the 900,000 btl not registered for tax headline

I think it`s no coincidence that the number of BTL mortgages issued has risen so much in the last few monts

Edited by long time lurking

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There will be lots of little fiddles only available through mortgage brokers and IFAs.

When I was shopping around for a annuity, I spent days getting quotes from every pension provider. An IFA was able to get me a rate over 1% higher than anything I could find and there was obviously a reasonable commission in it for him.

The good deals are not available direct to the likes of us........ Jobs for the boys!

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Anyone got links or evidence? Major media person seeks to do piece on it.

Well you generally need a 25% deposit to get a buy to let mortgage. That would stop most people.

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I think the BTL 'fraud' would occur only from those who have good equity in their current property but find themselves stymied re income multiples to trade up via residential mortgage means.

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Can't you do let to buy which would I guess make it 100% ok - if I understand what let to buy is.

...'let to buy' was the origin of BTL...it was introduced by Banks from Australia in the mid nineties UK depression of house prices to enable people who had to move to say another town/city for work to buy a new house by letting their current house without the need for selling at a loss...all risky stuff which has never been controlled by our financial illiterates the BofE and all Governments.....who have been backed by High Street Bankers and Brokers to keep the schemes going ...all one big bubble, which actually stimulated the dead prices of the nineties and have never looked back since...... :rolleyes:

Edited by South Lorne

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There is no such thing as a "Buy-To-Let Mortgage".

Mortgages are an explicit product, only available on your primary residence.

They include extra terms that say you can't be kicked out or forced to repay the money as long as you keep up the monthly payments.

"Buy-To-Let LOANS" are not mortgages, they are BUSINESS LOANS and follow business loan lines, including LTV restrictions on the asset used to back the loan which they can enforce through requiring full or partial cash repayment. They include no requirement to provide an owner-occupier with any notice prior to eviction as they have no legitimate tenancy rights. They have no requirement to negotiate or offer any assistance. They have no requirement for you to be 2.5 months behind before repossessing... 1 missed payment is enough.

To sum it up, if you buy a property to live in with a BTL loan, if you miss a payment or if house prices drop the LTV exceeds the loan terms, the property will be repossessed and sold at auction, with no right to do anything bar begging them for an expensive change of terms.

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Many thx guys

It's curious. I could swear lots of folk here were decrying BTL/owner occupation yet there is little on this thread to put meat on the bones, if anything.

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The facts are I don't think they are doing anything illegal as such. The original question was are people occupying properties they bought on BTL mortgages and the evidence against that is a) you do need an existing residential or BTL property to get a BTL and B) you need a massive deposit to get a BTL mortgage.

My own thinking re individuals who only own one property and are unable due to income multiple constraints to borrow enough on their own to buy a larger property is that they will convert the existing property into a BTL mortgage and use that income to bolster their borrowing potential for a more expensive property. I actually know a couple of people who have done that actually.

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Many thx guys

It's curious. I could swear lots of folk here were decrying BTL/owner occupation yet there is little on this thread to put meat on the bones, if anything.

Could give a name but they might end up losing their job ( independent mortgage broker) and they are a mate..... would of thought you would know a few you could introduce the media mate to though

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Anyone got links or evidence? Major media person seeks to do piece on it.

As with original, income self-declaration liar loans this is a scam which requires brokers etc. It is very tough to find a lender prepared to deal with an individual/company as they require large deposits, existing property (or residential mortgage) or proof of other income. If you, and those you hire, are honest let-to-buy is the most likely route:

http://www.thisismoney.co.uk/money/experts/article-2182623/Can-I-buy-flat-turn-existing-property-buy-let.html

If you aren't honest the best approach it is to find an EA with a bent broker and surveyor who feel the same way. The surveyor must be in with the lender who, in turn, must be prepared to accept their valuation and rental yield predictions. The surveyor then values the property at 20-25% over the purchase price creating the required deposit from instant equity.

Virgin Money offer first-time-buyer BTL mortgages to those with no existing property so long as you earn £25,000:

http://uk.virginmoney.com/virgin/mortgages/learn/buy-to-let/key_facts/index.jsp.

Again though, this is something a friendly broker can help with. They will have access to various 'lenders', mostly offshore who can make your purchase look like cash. The brokers find it much easier to gloss over the issue of existing ownership with such "deals". Totally unregulated of course, so caveat emptor.

Like the original self-cert liar-loans scam, BTL owner-occupier fraud is only something that will come out after the next crash. Those doing it are currently making money and hence unwilling to discuss it. Good luck to anyone trying to expose it now!

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