If you have a buy to let mortgage for a property or are thinking about getting one, you already know there are certain stipulations associated with this type of loan. However, if you’re considering actually living on the property yourself, there are even more factors to consider.
If you didn’t originally live on the property when you got the buy to let mortgage, the lender may allow you to later become a tenant of the property. This is due to the fact that buy to let mortgages are not regulated by the Financial Services Authority in the same way that traditional or residential mortgages are, but to let mortgages do fall under the umbrella of FSA regulations in terms of general rules. However, if you think you’ll be moving into the property for a long period of time, it may be best to switch your buy to let mortgage to a residential one. This way, the next time you want to take out a buy to let mortgage out to rent out another property, the lender won’t feel as if it has to be completely covered by the FSA to grant you the mortgage, which can be a hassle.
Before you decide to move into your buy-to-let property, go over the terms of your mortgage closely. If your contract states that you are the owner of the property solely for the purpose of letting it to other tenants, your lender may ask you to repay the mortgage if you become a tenant of the property. In this case, it may be best to go with a different lender for your residential mortgage and retain your buy to let mortgage from the same lender that issued it to you.
One way round it could be to get the loft converted, but unless you are a very talented handyman that would mean hiring professionals such as this loft conversions South London company if you are in the UK, or All Around Roofing for those in the States. This way you could let the loft while living in the main part of the house or vice versa. This would work best if you are on friendly terms with your tenant of course.
Of course, living in a separate property, even if it is very close to the buy-to-let property, will help you to avoid these complications. However, there are instances in which this information is necessary. Keep in mind that these rules may also apply if you are letting space covered by your buy to let mortgage to a close relative.