Case Study: Private School Teachers
One of our clients recommended that their colleagues speak to us about their mortgage. The couple lived on site at the private school where one of them worked. As a senior member of the staff they lived in ‘tied accommodation’ on the school site. They had recently renovated their previous family home and wanted to increase their mortgage to clear the loans and credit cards they had used. As they no longer lived in the family home, they would be letting the property under an Assured Shorthold Tenancy. However, their existing bank was not prepared to help them.
We come across this problem regularly, and it is quite common for teachers, or those in the armed forces that wish to rent out their home whilst living in tied accommodation. Most lenders will not help and will simply require that the customer takes a buy to let mortgage.
However we are aware of a high street lender that is happy to lend on normal residential rates with the knowledge that the property will be let. All they require is that the property is the customer’s only property in the UK and that the borrower will return to living there when there is a change in their employment. The lender will not use any rental income as part of their affordability checks, so the borrower will need to have sufficient income to support the mortgage taking into account any living expenses at their place of work. In these circumstances, we were able to secure a fixed rate of 2.30%. (APR 3.7%, the overall cost for comparison. The actual rate available will depend on your circumstances. Ask for a personalised illustration.)
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