Buying a property with a ppr and renting it out

[joehope]

I’m looking to see if any has be charged criminally for this and what laws would be broken, what may be repercussions,
For context if someone using there first time buy mortgage to buy a property and rent it out immediately ?
I have seen some where this could be cause the lender to require the full remaining balance immediately ! And that lenders may check rtb register, flip side if there always paying the mortgage on time with overpayments why would the look into a delivering mortgage.

 

[Knuttell]

I did similar 25 + years ago. Times may have changed but as long as you're making monthly payments I doubt they're too bothered?

I never informed them.

Are you in receipt of mortgage interest relief? Then this needs to be stopped.

Did you receive any govt assistance to purchase it?

The property I had was Dublin based with Sec 23, you were either Landlord or owner occupier and couldn't change horses mid stream until 5 years had elapsed and even then you couldn't avail of sec 23 as a landlord if you bought as owner occupier but I had blown through the relief anyway as PAYE slave due to the fact it was bought for 60k.

You also need Landlord Insurance, not owner occupier insurance. Ensure you use up to date re-building costs and ensure also you get liability insurance generally comes with such policy at 3mill plus.

 

[misemoi]

Another issue is your interest rate...if you get a PPR rate, investment rates are a lot higher so in theory you would have to inform the bank to update the rate. Not sure how they would react to the presumably much lower LTV in that case....they insist on a 30% deposit for investment.

 

[Leo]

For context if someone using there first time buy mortgage to buy a property and rent it out immediately ?

If the lender finds out, they might insist on immediate repayment of the loan as you would have made a false declaration in the application. I haven't heard of them going beyond that, and usually if they repayments are being made, they generally don't ask any questions.

Revenue might ask some questions though given they'll have access to records of both the grant and your rental income. Possible repercussions there are a demand for repayment of the grant along with further penalties.

 

[Brendan Burgess]

I’m looking to see if any has be charged criminally for this

I doubt that it's a criminal offence unless you claim tax reliefs such as help to buy to which you are not entitled.

 

[T McGibney]

I doubt that it's a criminal offence unless you claim tax reliefs such as help to buy to which you are not entitled.

I'd imagine the bank will raise their eyebrows at someone purporting to be a first time buyer and not being interested in help to buy.

 

[Knuttell]

I’m looking to see if any has be charged criminally for this and what laws would be broken, what may be repercussions,
For context if someone using there first time buy mortgage to buy a property and rent it out immediately ?

Missed that crucial piece....immediately.

Then this is premeditated deception as opposed to owning and living at the property for a few years.

What's the upside here for you?

You do understand thst you can 100 % write off interest against rental income

Lender will also look for proof property is insured. If they even do a rudimentary check they will see its a landlord policy. ( not sure how closely they look at such things though)

 

[DannyBoyD]

What's the upside here for you?

I imagine, as an FTB, its easier to get a mortgage for a PPR than a Buy-to-Let.

 

[misemoi]

I'd imagine the bank will raise their eyebrows at someone purporting to be a first time buyer and not being interested in help to buy.

Help to buy is only on new homes. Not every first time buyer is buying new and not everyone has a tax history to be able to benefit from help to buy.

 

[ClubMan]

I’m looking to see if any has be charged criminally for this and what laws would be broken, what may be repercussions,
For context if someone using there first time buy mortgage to buy a property and rent it out immediately ?
I have seen some where this could be cause the lender to require the full remaining balance immediately ! And that lenders may check rtb register, flip side if there always paying the mortgage on time with overpayments why would the look into a delivering mortgage.

Whatever about anything else, barring something like outright fraud, any issues between the borrower and lender would be a civil and not a criminal matter.

 

[joehope]

Missed that crucial piece....immediately.

Then this is premeditated deception as opposed to owning and living at the property for a few years.

What's the upside here for you?

You do understand thst you can 100 % write off interest against rental income

Lender will also look for proof property is insured. If they even do a rudimentary check they will see its a landlord policy. ( not sure how closely they look at such things though)

Thanks for replying
After all your feedback I believe that in this situation you’re best off not proceeding it would be better to occupy the house and rent out some rooms after a period try renegotiate it to being a buy to let, you would miss out on the interest relief for the first period ,
I’d imagine if you really wanted to you could get home insurance for the mortgage appoval and then after you get the keys cancel it and go with landlord insurance + public liability