Is this criminal?

richardbeatson

If I take out an interest only mortgage now and, in 12 months time, rent out the property for 12 months and I don't let my mortgage provider know about that does it constitute a criminal offence?

Regards

Richard

Noz

not sure about criminal, but you certainly will be in breach of a your mortgage terms & conditions unless your mortgage already allows this facility

herbiesjp

you would also need to notify your buildings insurer

silvercar

You would be breaching your mortgage contract.

In theory the mortgage company could then call in the loan.

AndrewSmith

richardbeatson wrote:

If I take out an interest only mortgage now and, in 12 months time, rent out the property for 12 months and I don't let my mortgage provider know about that does it constitute a criminal offence?

Regards

Richard

Not criminal but you would be in breach of a legal mortgage contract under civil law. Also who would you blame if your tennants burnt the place down and your insurance wouldn't pay out as it would not be covered for letting?

Then you'd be in the brown stuff up to your neck. Firstly you would be personally liable for the damage and secondly your lender would most likely load your interest rate as a result of the new 'buy to let' status not being declared.


If you loaned me your car on the understanding that it would be used solely by me for driving to work and back, you would be a bit arsed off if you then discovered that I had been using it as a taxi or teaching people to drive in it.

It is exactly th same with a property because never forget that until you make your final mortgage payment you don't actually own the property. With an interest only mortgage you are effectively renting it from the lender.

Tell them and be honest about it. Most are fine subject to the insurance being updated.

kenshaz

Just proves the point that whilst you have a mortgage you are not free,but shackled to a lender,who can dictate your course of action.

AndrewSmith

kenshaz wrote:

Just proves the point that whilst you have a mortgage you are not free,but shackled to a lender,who can dictate your course of action.

Of course they can dictate what you do with the property they have loaned you the money to buy.

After all, they do own whatever share you have mortgaged so they are entitled to their say.

jamesd

Just ask your broker to find a lender who will agree to let without significant penalty in case you decide to move later and want to keep it. It's a common enough fallback option for normal borrowers who change jobs.