Mortgages - residential but buying to fret

Discussion in 'Finance, Property, Law' started by toyboy1976, Apr 15, 2010.

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  1. Last time i looked into this was pre crash(2008/7) - but i remember a thread/discussion about whether we (collective AF) could apply for a residential mortgage but BTL the property immediately.
    thread wisdom at the moment suggests no, but the 2008/7 discussion did say that the taxman and mortgage advisorsors/companies did accept that for "service reasons" we were unable to occupy the property and thus could rent it out.

    My memory may be a little faulty but the gist was that we could apply for residential mortgages. I dont know if this has moved on and this is a completely outdated loophole (but it would surprise me given the current public mood toward the forces..then again gvmt/bureaucrats/chasing a profit!).

    Does anyone have a light to shine on this one? or remember the thread, i am about to go round one with the IFA so help would be greatly appreciated.
  2. Think i found it.... does anyone have any more uptodate info than 2007!!
  3. BiscuitsAB

    BiscuitsAB LE Moderator

    well you could always buy it to live in it and then "get posted" if you ask your lender for a declaration stating your going to be letting it out most will just take the piss by charging you a couple of hundred quid for their say so.
  4. If your posted and have to move and then take out landlords insurance, you should be able to rent the house out without telling the lender yes/no.

    I've seen a few sites which say the insurance will be invalid if a claim is made.

    Has anyone had this scenario happen to them? What was the out come?

    Also has anyone had any experience of Barclays/Woolwich when it comes to declaring your primary residence for rental on a normal repayment mortgage?

  5. This is something which I believe an awful lot of us are going to be getting a sharp kick in the sweatys over very soon.

    My mortgage is with Nationwide Building Society. I have notified them that 'for Service reasons I am unable to live in my family home, therefore I have had to place the house on the rental market'. Those kind people at the Nationwide have just sent me a letter, that wef 1 December 2010 I am going to be hit with an extra 1.5% levy added to my monthly mortgage interest payments as I am letting my house out. It would appear that Service personnel are not exempt this new charge.

    So, now not am I having to pay tax on any money I receive for letting my house out, add to that paying a 1.5% interest levy on my mortgage, but also potentially a huge Capital Gains Tax bill when I sell the house if media reporting is to be believed. It is no longer going to be worth a Service person buying their own rung on the housing ladder when serving as they will be getting massively penalised financially.

    Whats the option? leave the wife in the house we have bought, and go VOLINSEP? Yet another strain on forces marriages if the folks are having to live apart because the cost of having your own place and not being able to live in it for Service reasons is too high.
  6. BiscuitsAB

    BiscuitsAB LE Moderator

    Two things mate.
    1. CGT bill don't worry about it, its not going to be that big. If you want to PM me I'll run through the whys and hows (and all for free)

    2. 1.5% levy? really! get a copy of your mortgage and ask them to show you where it says it. If it says it in black and white guess what :) if it doesn't ask them to explain how they think that they can amend a contract unilaterally.
  7. Just had the letter today on fee amendments and bundled in there is an extra 1.5% on BMR for buy to let mortgages..

    Sneaky fookers..

    BTW it says effective 1st Sept 2010...
  8. fecking leeches, alot of people just don't tell em.
  9. Guy's,

    Just been in touch with Nationwide to see if their new rule changes on the 1.5% levy were to apply to members of the armed forces and was advised that it won't, however they did say that it is important that they are informed of any changes, or they will add charges.

    Further information can be found on the Nationwide website, along with the notification form.