Question: to pay off accumulated debts I have had to sell my home, put my furniture in storage and move in with my daughter, though this arrangement can't go on for much longer. I still have a small buy-to-let flat, which is vacant. I will have to sell it at some stage but would like to live in it until then. I have a buy-to-let mortgage on it, so am I allowed to use it as my home?
Answer: a buy-to-let mortgage is usually based on the expected monthly rental income, while a residential mortgage is generally based on a multiple of the borrower's annual income. Your buy-to-let mortgage is likely to have conditions attached restricting the type of tenant to which the property may be let, precluding letting it to the borrower's family members, or banning the borrower from living there. If you have an income, ask your lender if you can change the buy-to-let mortgage to a residential one — or you could redeem the mortgage with your current lender and take out a new residential mortgage with another lender.
These options will only be available if your income is sufficient to meet lending criteria. If you can get a residential mortgage you will of course be able to occupy your property. Even if you have no income at all, do communicate with your lender and try to agree that you may stay in the property pending sale. When you eventually sell, consider whether there is a capital gains tax liability which will depend on whether the property has actually been used as your main residence, and for how long.
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