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Mortgage Application: Investor or FTB

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  • 10-02-2014 1:18pm
    #1
    jimmurt
    Registered Users Posts: 367 ✭✭


    Hi,

    I'm applying for a mortgage at the moment. Because there is a tenant in the house and I don't plan on moving into it for a couople of years, I put down Investor as the type of mortgage I needed.

    This gives me more a more expensive mortgage when comparing like for like.

    A friend told me that since I do plan on moving into it at some stage and having it as a primary residence, then I can go for a first time buyer mortgage.

    Is this true and will the bank look for some sort of proof of this or even will I have to show them I live there somewhere down the line.


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    #2
    marathonic
    Registered Users Posts: 1,665 ✭✭✭marathonic


    You'll need an investment mortgage. You're also likely to need a minimum 25% deposit with most lenders. The rent is likely to need to cover 125% of the mortgage repayment (which is stress tested at 2% above current rates).

    If you could secure residential rates based on your intention to live in a house at some point, every landlord in the country would "intend" to move into their investment properties at some point.


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    #3
    jimmurt
    Registered Users Posts: 367 ✭✭jimmurt


    marathonic wrote: »
    You'll need an investment mortgage. You're also likely to need a minimum 25% deposit with most lenders. The rent is likely to need to cover 125% of the mortgage repayment (which is stress tested at 2% above current rates).

    If you could secure residential rates based on your intention to live in a house at some point, every landlord in the country would "intend" to move into their investment properties at some point.

    I have the 25% deposit. Ok if I say I'm going to live in it straight away, what proof do I need?

    Basically, when applying for a FTB mortgage do you need to prove that you'll be indeed living in the property from day 1?


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    #4
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,684 Mod ✭✭✭✭Henry Ford III


    jimmurt wrote: »
    I have the 25% deposit. Ok if I say I'm going to live in it straight away, what proof do I need?

    Basically, when applying for a FTB mortgage do you need to prove that you'll be indeed living in the property from day 1?

    I think it'd be very unwise to be economical with the truth in your circumstances.


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    #5
    jimmurt
    Registered Users Posts: 367 ✭✭jimmurt


    Henry Ford III wrote: »
    I think it'd be very unwise to be economical with the truth in your circumstances.


    Can you elaborate?


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    #6
    lynchie
    Registered Users Posts: 1,990 ✭✭✭lynchie


    jimmurt wrote: »
    I have the 25% deposit. Ok if I say I'm going to live in it straight away, what proof do I need?

    Basically, when applying for a FTB mortgage do you need to prove that you'll be indeed living in the property from day 1?

    I assume that the contract for a non investment mortgage would assume there is vacant possession, something which would not be true.


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    #7
    Henry Ford III
    Moderators, Business & Finance Moderators Posts: 17,684 Mod ✭✭✭✭Henry Ford III


    jimmurt wrote: »
    Can you elaborate?

    I don't think I need to really - however - You expect a lender to advance you a lot of money, and before they do so you're prepared to lie to them on the application so you can pay them back less.

    Seriously?


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    #8
    jimmurt
    Registered Users Posts: 367 ✭✭jimmurt


    Henry Ford III wrote: »
    I don't think I need to really - however - You expect a lender to advance you a lot of money, and before they do so you're prepared to lie to them on the application so you can pay them back less.

    Seriously?

    Yep!


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    #9
    marathonic
    Registered Users Posts: 1,665 ✭✭✭marathonic


    In the UK, lying like this results in your insurance on the property to be invalid. I've heard references to it many times. You have to either get Consent to Let (which the bank offers primarily to allow people to temporarily rent their previous PPR whilst they're awaiting a sale and usually lasts up to a year) or move to a BTL mortgage.

    However, I've never heard such references in relation to Irish mortgages - so I assume it doesn't apply here. I'd read your landlord insurance policy VERY carefully to make sure it doesn't apply. This is one of many things to take into consideration.


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