Buy to Let Mortgage? First I knew about it!

Stevebb

About 5 months ago, I enquired to my Mortgage Co' (Abbey/Santander) to request permission to let, as I was soon to move away but did not want to sell. I was told not a problem, and that when ready, to write to them. Oh, and there would be a £300 fee.

So recently I wrote the letter to request permission to let and I got a strange letter back stating the following:

"I can confirm that the mortgage is a buy to let mortgage".

When I called them about this they explained that there was no need to request permission to let as it was a buy to let product, and therefore there was no £300 fee either.

Obviously this sounds great, but I still find it strange because at no point when I re-mortgaged (nearly 3 years ago - I am free to change mortgage at any time now) was buy to let mentioned, and it has never appeared on any paperwork.

Having read that recently Mortgage Companies are less willing to grant permission to let, I was just wondering if there may be an ulterior motive here, and will a buy to let product effect my tax status in any way?

CapJ

Did you go through a broker? It maybe the broker thought it would be easier to put through a buy to let mortgage as different income requirements (it is the rent from the property that is looked at first).

Still if you are on a buy to let mortgage the consequences are: You may be on a higher interest rate. It will almost certainly be against the terms and conditions of your mortgage to live in the property. And a fraud may have been committed in obtaining the mortgage (unless it is a mistake).

Stevebb

Thanks CapJ, and yes, I did go through a IFA 30 months ago, but at no point was there ever any mention to him of me renting it out and not living there, or buy to let. And as I cannot find "buy to let" anywhere on the paperwork from the last 3 re-mortgages.

The Santander person I spoke to seemed to be very matter of fact about the fact it was a buy to let mortgage and was basically inferring it made no difference. Getting what these people say to you in writing though, is of course, another thing entirely.

I had lived for 10 years in the property, until recently. Now I'm unsure if I purchase another property, so I get it on a residential mortgage and if so it is my first or second?

DVardysShadow

CapJ wrote: »

Did you go through a broker? It maybe the broker thought it would be easier to put through a buy to let mortgage as different income requirements (it is the rent from the property that is looked at first).

Still if you are on a buy to let mortgage the consequences are: You may be on a higher interest rate. It will almost certainly be against the terms and conditions of your mortgage to live in the property. And a fraud may have been committed in obtaining the mortgage (unless it is a mistake).

Man pays too much for mortgage and someone shouts
FRAUD

CapJ

DVardysShadow wrote: »

Man pays too much for mortgage and someone shouts
FRAUD

I didn't shout fraud you did. I suggested a fraud may have been committed, and if a broker deliberately misfilled in the application in order to obtain his commission he would indeed have committed a fraud. Do you actually have anything useful to say to help the OP?

CapJ

Stevebb wrote: »

Thanks CapJ, and yes, I did go through a IFA 30 months ago, but at no point was there ever any mention to him of me renting it out and not living there, or buy to let. And as I cannot find "buy to let" anywhere on the paperwork from the last 3 re-mortgages.

The Santander person I spoke to seemed to be very matter of fact about the fact it was a buy to let mortgage and was basically inferring it made no difference. Getting what these people say to you in writing though, is of course, another thing entirely.

I had lived for 10 years in the property, until recently. Now I'm unsure if I purchase another property, so I get it on a residential mortgage and if so it is my first or second?

What paperwork do you have? Do you have the name of the "product"? You certainly have the permission in writing since you have the letter from Santander saying it is a buy to let mortgage.

DVardysShadow

CapJ wrote: »

I didn't shout fraud you did. I suggested a fraud may have been committed, and if a broker deliberately misfilled in the application in order to obtain his commission he would indeed have committed a fraud. Do you actually have anything useful to say to help the OP?

Perhaps it would be useful to consider the fact that we are dealing with Santander before shouting FRAUD
Also, - you've done it now - if you do shout FRAUD, it is better to point a finger at who you think done it, rather than leaving it open that it could have been OP.

CapJ

DVardysShadow wrote: »

Perhaps it would be useful to consider the fact that we are dealing with Santander before shouting FRAUD
Also, - you've done it now - if you do shout FRAUD, it is better to point a finger at who you think done it, rather than leaving it open that it could have been OP.

So still nothing useful to say? I suggest you reread my post. I didn't shout fraud. Please can you try to help the OP instead of writing fraud in big red letters like a little child?

kingstreet

Steve - at the time of applying for the mortgage, would you have had any difficulty in providing evidence of income?

Was Abbey doing BTL business via brokers at that time? TBH I can't remember when they stopped.

holly_hobby

Stevebb wrote: »

"I can confirm that the mortgage is a buy to let mortgage".

When I called them about this they explained that there was no need to request permission to let as it was a buy to let product, and therefore there was no £300 fee either.

Obviously this sounds great, but I still find it strange because at no point when I re-mortgaged (nearly 3 years ago - I am free to change mortgage at any time now) was buy to let mentioned, and it has never appeared on any paperwork.

Having read that recently Mortgage Companies are less willing to grant permission to let, I was just wondering if there may be an ulterior motive here, and will a buy to let product effect my tax status in any way?

Being on a buy to let mortgage (BTL) does not on its own affect your tax status - unless you are actually renting the property (as is the intended basis of the mge) and therefore in receipt of rental income - which of course is taxable.

Without being present at the time of the advice, nor having sight of the mortgage offer, or details of your income & status at the time of your original mge application, it is difficult to say why you are are on a BTL mortgage. It may even been a simple error at the keying stage on Santanders side (or a mis-reading/understading of your mge record when you called re the CTL) - which is not unheard of, but does not seem to have been picked up by any of the responses to date.

So the situation is this, if you don't have a copy of your original a[pplication, illustrations, and mortgage offer, under S10 request if necessary (and a £10 fee), you request a copy of the same from the lender, check over its details to see exactly what you applied and signed for.

Having checked this over, and if you did not apply for a BTL product i.e you have incorrectly been placed on a BTL at keying stage by the lender. The best I suggest you could hope for in making a complaint, would be a refund of the difference between the BTL rate charged and svr throughout the period.

The lender having in effect placed you back to a residential, will then request the £300 fee to change to CTL - which they would no doubt offset off any ovepayment of interest to be returned as a result of the error. (although of course they may choose to omit this charge for the inconvenience caused)

If however, the orig mge application and other POS docs, show that you did indeed apply for a BTL mge - as previously stated this is possibly to do with your income or employment status at the time (however I do have to say that ordinarilly the lender will also want sight of an assured shorthold tenancy in support of a BTL app, but they may have just omitted to chase this up in your case), I would leave sleeping dogs lie, unless your income and status was wholly suitable to service a residential mge at the time of app, and it appears the broker may have selected a BTL product for other reasons, such as the payment of a larger proc fee (commission from the lender).

There has been some talk of fraud within this thread, Fraud is classed as the deliberate concealment or mis-representation of data provided in support of (in this case) a financial application for mge lending.

Notwithstanding the fact that your intended residence from outset takes the BTL, from unregulated to regulated, you are claiming that the first time you became aware of the BTL status of your app, was recently when you rang the lender for consent to let. As part of a lender investigation, should this matter ever proceed that way, your actions suggests that you are not aware of the BTL status of orig application as why would you seek consent to let (although there will be other aspects of the matter obv investigated which I won't go into at this point) - the broker however may be in a different spot of bother.

Depending upon whether the BTL product was clearly marked and explained before your signautre to the app (or the app marked after your signature) - you need to be carefull as you do have a duty of care to examine and verify all info contained within the application, offer etc is true and accurate - so if it is contained in the orig offer it should have been raised then.

But we are getting ahead of ourselves - lets firstly (if you want to invetigate the matter further), get some documentation and see exactly WHERE the (currently considered) "error" origianted from - and act accordingly.

Hope this helps

Holly

leachyd

I'm shouting FRAUD