Remortgaging buy to let to residential (5 tips)
By
HuutiMoney
Can you change a buy to let to a residential mortgage?
Yes, you can, borrowers always wonder if they will be able to change their buy to let mortgage to a residential mortgage if their circumstances change and the short answer is yes, you will be able to by remortgaging your buy to let mortgage to a residential mortgage with the same mortgage lender of a different mortgage lender..
When considering moving into a buy to let property, you should always inform your mortgage lender if not you could be in breach of your mortgage agreement and committing mortgage fraud.
If you intend to stay in the buy to let property, you will need to switch to a residential homeowner mortgage and your ability to do so will be based on your mortgage affordability for a residential mortgage.
If you intend to only stay in your buy to let property temporarily and then re-let it then you could get permission from your buy to let mortgage lender prior. The buy to let mortgage lender may let you stay there for the same mortgage rate or change the mortgage rate to reflect your new circumstances.
You can seek a remortgage to a better buy to let mortgage lender who will let you stay in the property short term and then re-let it out rather than remortgaging from a buy to let to a residential mortgage.
Remortgaging from a buy to let to a residential mortgage with the same mortgage lender
Not all buy to let mortgage lenders will let you remortgage to a residential mortgage. In fact, not all buy to let mortgage lenders may offer residential mortgages. If you are considering remortgaging from a buy to let to a residential mortgage then you may want to ask your mortgage lender first but also speaking to a fee-free mortgage broker may also have some advantages as they may be able to compare the whole market and see if there are other suitable lending options available to you to remortgage from a buy to let mortgage to a residential mortgage.
When remortgaging from a buy to let mortgage to a residential mortgage with the same mortgage lender you may avoid any early repayment penalties that may have been due.
Remortgaging from a buy to let to a residential mortgage with a different mortgage lender
All mortgage lenders are required to carry out mortgage affordablity assessments when you intend on getting a mortgage so when remortgaging from a buy to let mortgage to a residential mortgage to a new mortgage lender you can expect that some mortgage affordability assessments will take place to ensure you can afford the new mortgage.
You may also need to pay new mortgage fees such as the mortgage arrangement fee and all other fees involved with the remortgage process.
Can you remortgage from a buy to let mortgage to a residential mortgage with bad credit?
If you want to remortgage from a buy to let mortgage to a residential mortgage with bad credit this may be difficult as mortgage lenders may usually want to lend to borrowers who have a good credit score and have shown a good repayment history on all their previous credit obligations.
There are however some residential mortgage lenders who may be willing to offer you a remortgage from a buy to let to a residential mortgage based on the type of bad credit you have or had and your personal circumstances.
If it was a CCJ which was satisfied and is a certain age then some mortgage lenders may be willing to lend. Other mortgage lenders may lend if the CCJ didn’t surpass a certain amount.
When looking to get a mortgage with bad credit the requirements from different mortgage lenders will differ and a bad credit mortgage broker may be able to assist you in remortgaging from a buy to let mortgage to a residential mortgage]()
Bad credit could include:
A CCJ
An IVA
A debt management plan
A default
A bankruptcy
A home reposession
Can you remortgage from a buy to let mortgage to a residential mortgage if you are self-employed?
Most mortgage lenders will scrutinize the finances of self-employed borrowers more to ensure they have a reliable and stable income with little gaps during employment.
Self-employed borrowers will have to present documents with at least 3 years worth of accounts before most mortgage lenders may consider them. There may however be some mortgage lenders who are willing to consider a self-employed borrower with less than 3 years worth of accounts but they will usually want to see at least 12.
When looking to remortgage from a buy to let to a residential mortgage as a self-employed borrower you may need to provide the below documents:
Your CV
3 months worth of bank statements.
You may want to use a self-employed mortgage broker when considering remortgaging from a buy to let mortgage to a residential mortgage.
What are the mortgage affordability requirements when remortgaging from a buy to let mortgage to a residential mortgage?
The mortgage lender will want to see a minimum income which can accommodate the whole mortgage based on their mortgage multiple. Some mortgage lenders will offer income multiples of 3 and others will offer up to 4 and above.
The income multiple you are offered will depend on the mortgage lender, your mortgage affordability which includes your creditworthiness, your mortgage deposit and the type of property you are remortgaging on. Example: If you are trying to remortgage from a buy to let to a residential mortgage on a non-standard construction property then you may find it harder to get a residential mortgage
They will also want to see that you have enough monthly disposable income and can comfortably cover the monthly mortgage repayments for the mortgage term.
Some mortgage lenders may also accept benefits whilst some will not accept benefits. If benefits play a significant stake in your income then you will want to find a mortgage lender who accepts a huger percentile of benefits as income as mortgage lenders all have different percentile for which they accept benefits and other supplementary income.
When considering remortgaging from a buy to let to a residential mortgage, supplementary income could include:
Pension income
Investment Income
Overseas earned income
Maintenance Payments
Rental Income
Bursary
Stipend
- Attendance Allowance benefit
- Carer’s Allowance benefit
- Child Benefit
- Child Tax Credit benefit
- Disability Living Allowance (DLA)
- Incapacity Benefit (IB)
- Industrial Injuries Benefit (IIB)
- Maternity Allowance benefit
- Pension Credit benefit
- Severe Disablement Allowance
- Widow’s Pension benefit
- Working tax credit benefit
Can you raise additional funds from remortgaging from a buy to let to a residential mortgage?
Yes, you may be able to raise additional funds when remortgaging from a buy to let to a residential mortgage as long as you have a minimum 5% equity in the property and the loan to value rate falls in line with the mortgage lenders criteria.
If you want to raise extra funds when remortgaging from a buy to let mortgage to a residential mortgage then you may want to speak to a specialist mortgage broker who may be able to find you the best remortgage options.
Is remortgaging from a buy to let to a residential mortgage difficult?
No, remortgaging from a buy to let to a residential mortgage isn’t difficult. It all depends on your mortgage affordability which are influenced by your personal circumstances.
If you are worried about going through the remortgage process alone then speak to a mortgage broker who may be able to help you remortgage from a buy to let to a residential mortgage.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.
