THE QUESTION

If a landlord had a normal mortgage, with a Lease Option Agreement (LOA) to just rent the property rather than buying it, would they need to change their mortgage to a BTL/HMO/SA mortgage?

1) I assume they would. If they would, how have you found explaining this to the home owner?

2) What about those home owners who are on a really good rate from an old mortgage and changing would mean they don't get such a good deal?
Also with a LOA, say if the term is 5 years. Can you purchase anytime with the 5 years, so even after say 3 years?

THE ANSWER

The whole point of an LOA should be that is gives you the opportunity, but not the obligation, to purchase a property - and you can exercise that option at any point during the agreement.

But not all option agreements allow for that.

Actually there are LOAs and PLOAs. The P being the purchase part and, unless you have it written into the option contract that you have the right to purchase at a price agreed at the inception of the...