Btl Mortgages Used For Owner Occupation

[little fish]

A poll of 382 brokers conducted by Mortgage Strategy reveals that 53 per cent of advisers (203 individuals) have had a client who attempted to get a property for residential purposes by getting a buy-to-let mortgage.

http://www.mortgagestrategy.co.uk/news-and-features/sectors/regulation/regulation-news/over-half-of-brokers-have-had-clients-trying-to-game-buy-to-let/2007544.article

Most lenders will no longer accept regulated BTL. These loans now have to be processed as 2nd homes. They were a popular product and I would imagine still are, particularly for parents buying for their children. Some student accommodation was done this way for years. But nobody who has done it without the lenders knowledge is going to come out and say it.

The lenders have ways of finding out who is living in properties, access to the electoral roll, whose name is on the utility supply along with checks like this one from Experian.

http://www.experian.co.uk/consumer-information/mover-alerts-information.html

Identification of undisclosed Buy-to-Let risk

When a customer lets out their home without advising their mortgage lender, it means the debt is incorrectly priced and risk is increased. Getting early notification of properties to rent with Mover Alerts allows the lender to be proactive in protecting its position.

http://www.experian.co.uk/identity-and-fraud/fraud-prevention-and-detection.html

The anti fraud systems are there for use - this Experian one is one of many. If the lenders really wanted to find out what was going on, they could. Same as self cert, the systems are there, but perhaps there's more profit if a blind eye is turned (IMO).

[winkie]

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

Who says the deposit isn't borrowed from somewhere?

[SarahBell]

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?

You don't. You just need enough assets they can take back any money you don't pay them back for BTL.

For most people that would indeed be their own home.

[little fish]

Most of the BTL lenders now need at least home or 'investment' property owner named on each application, but yes It is a reasonably recent adjustment to BTL criteria.

Paragon - FTB accepted as long as at least one other applicant is a property owner

http://www.paragon-mortgages.co.uk/Files/PMLGeneric/Literature/Products/Lending%20Guidelines%20and%20Submission%20Requirements.pdf

BM Solutions - FTB accepted as long as one one other applicant is a property owner http://www.bmsolutions.co.uk/criteria/buytolet/

The Mortgage Works - FTB with another applicant who is a home owner or experienced LL (experienced LL's are LL's with 6 months experience )

http://www.themortgageworks.co.uk/lendingcriteria/btl-criteria#general

I think Clydesdale may still allow a FTB get a BTL mortgage, not sure though. None of these lenders would accept any other form of assert as security, why would they? The systems are already in place to repossess properties, if they need to.

Makes it an odd sort of a business though, open mainly to existing property owners.

[winkie]

Most of the BTL lenders now need at least home or 'investment' property owner named on each application, but yes It is a reasonably recent adjustment to BTL criteria.

Paragon - FTB accepted as long as at least one other applicant is a property owner

http://www.paragon-mortgages.co.uk/Files/PMLGeneric/Literature/Products/Lending%20Guidelines%20and%20Submission%20Requirements.pdf

BM Solutions - FTB accepted as long as one one other applicant is a property owner http://www.bmsolutions.co.uk/criteria/buytolet/

The Mortgage Works - FTB with another applicant who is a home owner or experienced LL (experienced LL's are LL's with 6 months experience )

http://www.themortgageworks.co.uk/lendingcriteria/btl-criteria#general

I think Clydesdale may still allow a FTB get a BTL mortgage, not sure though. None of these lenders would accept any other form of assert as security, why would they? The systems are already in place to repossess properties, if they need to.

Makes it an odd sort of a business though, open mainly to existing property owners.

Makes you wonder why they will lend to people for a letting business and not for other viable businesses......is it because there will always be a property held as security if all else fails, a business no matter how good is only as good as the person/s running the business.......what are banks there for, to lend against land and buildings or help kick start the economy by lending to good businesses with a future?.....the balance is top heavy and out of kilter.

[Wurzel Of Highbridge]

Makes you wonder why they will lend to people for a letting business and not for other viable businesses......is it because there will always be a property held as security if all else fails, a business no matter how good is only as good as the person/s running the business.......what are banks there for, to lend against land and buildings or help kick start the economy by lending to good businesses with a future?.....the balance is top heavy and out of kilter.

It comes back to rigging the housing market so you can't lose - since you can't do that with real business it's far more risk than loaning against a rigged housing assets.

Bring back capitalism.

[South Lorne]

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.

...as stated the BTL product was introduced initially as 'let to buy' mid 90's a time of depressed house prices to avoid the loss realisation in most sales at the time ...and in many cases now ...keep the balls juggling with BTL/LTB was the motto ...but the BofE, Government and Banks were quite happy to go along ...and this is why we are where we are ...overpriced houses which will always find a lender...and all the little tricks of the trade developed over these years.....but total stalemate for the next generation.....