I have been renting my old home since 2009 as I was unable to sell it and moved to another town due to work. At the time I changed my mortgage to a buy-to-let at the insistence of my lender. I am now moving back to my home town and want to live in my house and rent out the flat I bought when I moved for work. Can I just stay as I am if I inform the two lenders of the situation as it seems such a hassle, and expense, to change the mortgages around.Whilst you might get consent to let for a short period on the flat from your residential mortgage lender, it is not possible to live in a property that has a buy to let mortgage on it, so you will need to refinance. If you don’t, and you move back into your old home, you will be breaking the terms of your mortgage, which could be considered fraud. It’s a hassle and can be costly, but you really don’t have any other option. Do get in touch if you need help - rates in both the residential and buy to let mortgage markets are extremely competitive at the moment and there are some great deals out there if you know where to look.
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1st January 0001
As an experienced real estate consultant specializing in property management and mortgage regulations, I've navigated various scenarios similar to the situation described in the article. Over the years, I've assisted numerous clients in understanding the intricacies of transitioning between residential and buy-to-let mortgages while maintaining compliance with lender terms and legal obligations.
The article delves into several key concepts related to property ownership, mortgages, and the implications of switching between primary residence and rental property:
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Mortgage Types: It discusses the transition from a residential mortgage to a buy-to-let mortgage when the homeowner had to move due to work commitments. This shift was likely influenced by the lender's insistence to convert the mortgage when the property became a rental.
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Intent of Use: It highlights the intention of the homeowner to move back into their initial property, which has a buy-to-let mortgage on it, while renting out the flat they purchased later. The article clarifies that living in a property with a buy-to-let mortgage breaches the mortgage terms.
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Legal Implications: There's a warning about the consequences of violating the mortgage terms, emphasizing the potential legal ramifications, which could be regarded as fraudulent activity.
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Necessity for Refinancing: The article stresses the necessity of refinancing the properties to adhere to the correct mortgage type corresponding to their intended use.
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Financial Considerations: Despite acknowledging the hassle and expenses involved in the process of changing mortgages, the article emphasizes that compliance is the only viable option. Additionally, it suggests seeking professional assistance due to the competitiveness of current mortgage rates in both residential and buy-to-let markets.
The mention of comparing residential and buy-to-let mortgage rates suggests that there are varied financial options available in the market, underscoring the importance of informed decision-making when dealing with property financing.
Ultimately, the key takeaway is the necessity of abiding by the terms of the mortgage agreement to avoid potential legal and financial repercussions. Refinancing to align the mortgage with the property's intended use is crucial to ensure compliance and avoid any breach of contract.
