HSBC residential to buy to Let

Found 14th May
My client has a residential mortgage with HSBC but rented the property years ago. He has enough cash now to repay his mortgage.
He now wants to change the mortgage to BTL to raise some money for his next property. He was told by mortgage advisor that HSBC can be tricky and also he will be better off not paying it off as he will be able to get a mortgage as BTL easier if there is an existing mortgage on it. But mortgage advisor doesn’t know it was rented out years ago.
1- do you think it is better to contact HSBC and say it was started last year and change to BTL? Or pay it off and get a new mortgage? If paying a mortgage off , will HSBC look back to make sure it was not rented
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Your Client?
Your Client?
Joined 14th May 2018

Posted no deals either.

1) renting out a house which has a standard mortgage is against the terms of the mortgage, it may invalidate any insurances you have such as buildings or contents cover you have, if the mortgage company find out they will ask for the loan repayment in full and may put a black mark against your name which may prevent you getting future mortgages as you have effectively committed mortgage fraud.
2)repaying a mortgage early will likely incur an early repayment fee
3)owning a property outright can help secure another mortgage as it could also be secured against that asset too in the event of non payment
4)if renting ensure the person complies with all the new landlord regulations (it can be expensive if you don’t so it’s best to and make sure it’s registered as a HMO if that applies), fines for not doing it are eye watering and they will still make you do everything properly and pay the fine.
If you are taking money off your 'client' for this advice - Shame on you!
Edited by: "mrty" 15th May
Firstly, your ‘Client’ needs to sack the mortgage advisor and you should relinquish any involvement in helping them in this scenario as you clearly are not a financial advisor in any sense of the word.
Let’s get this straight,
your ‘client’ already owns the property and wants to LET out the property to BUY another property, in which case he needs a LET to BUY mortgage not a buy to let. He can't buy the property off himself can he?
HSBC do not to do Let to Buy mortgages and that’s why ‘it’s tricky’.
Your Client needs to find a bona fide Mortgage Advisor that can access all the Let to Buy deals that are specialist products rather than a High Street product.
The Mortgage Works (which is part of Nationwide) would be your client’s first port of call but they do not deal directly with the public and will only lend via a Broker.
If you want a BTL it's better to have a residential mortgage as the BTL mortgage co would like to make sure you are not planning to live in the property.
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