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Does flipping after three months affect mortgage potential

q&a Jan 20, 2019

THE QUESTION

I’m flipping a house after three months,  I’ve heard most lenders won’t lend against a property unless I (the seller) have owned it for at least six months!, is this right?

THE ANSWER

That’s true to a point, but it depends on the lender.  A number of BTL lenders impose this restriction on the seller.

However, you shouldn’t really be selling to other investors as they view it as a logical rather than emotional purchase, often not wanting to pay full market value.

Main residence lenders are different, to a degree.  There are some that still impose the same restriction on sellers, but it is not across the board by any means.

So your buyers will not have access to all lenders (subject to their circumstances) until you have owned the property for 6 months.  The net result of that is they may be excluded from some market leading deals.

The key here from people who successfully sell within 6 months is - transparency.  You should be open with everyone concerned, your agent, your buyer, your buyer’s solicitor and mortgage broker.  This is particularly true if you are dealing with a first-time buyer, who can get spooked at the slightest thing.

If you are selling though an agent and they have an office-based broker, you can wise them up to search only for lenders that are happy with you owning for less than 6 months.

Clearly you can steer them to a broker of your choice, but some buyers will be suspicious why you are doing that, again transparency is the key.

Your best bet is to make the house so attractive that their desire to own it and live there is greater than their need to be a little pickier with the mortgage lender they choose.

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