What actually happens if you rent out your property and don't tell the lender?

richardw

There's probably something in the proposed mortgage's Ts & Cs that clarifies matters, perhaps have a good read of them.

GAH

OP, have you ever had money taken out of your account via someone that has gooten hold of your card details. If so, its annoying isn't it, this is fraud. Different scenario, but at the end of the day fraud is fraud.

I digress anyway, you have already said you have no morals.

As I and others had said, yes they can find out, and they can either wack your interest rate up or ask for all the money back (depending who the lender are).

You sound like a lovely person, and if you go ahead with things, hope you are caught and you do face the harshist penalties.

moneysaver45

brit1234 wrote: »

You forgot to add being arrested, charged, convicted and prison for fraud by representation. I love the new fraud act it is so easy to arrest people who do this. If you say no one will find out your wrong. Nowadays police share so much info with partners such as councils, banks and of course we have our sources (members of the public often inform).

But at the moment you haven't started you stupid idiotic plan. Instead we are looking Conspiracy offences with evidence stored on this discussion thread and your internet address recorded.

Do the right thing and get a buy to let mortgage rather than face fines, prison and be credit blacklisted.

I do not believe for one second you would go to prison for this so-called 'crime'. That is scaremongering. The difference in profit between a residential mortgage and a buy-to-let is substantial enough to make a big difference, we're not just talking about a couple of hundred quid here.

GAH wrote:

OP, have you ever had money taken out of your account via someone that has gooten hold of your card details. If so, its annoying isn't it, this is fraud. Different scenario, but at the end of the day fraud is fraud.

That's not the same thing at all. No, I've never had someone take money out of my account, but what you'd be describing there is someone removing my money without my consent.

In my scenario, the lenders were going to give you the same amount of cash anyway, the difference is what you plan to do with that cash vs what you tell them you plan to do with it. Apparently telling them one thing over the other results in double the repayments for no good reason. The value of the property is still the same, the amount they're lending is still the same, it's just that for some reason they decide to charge you over the odds for fees.

zappahey

moneysaver45 wrote: »

Now- how likely is it that a lender would actually find out? How would they ever get to find out exactly? If the mortgage is always paid on time every month, surely they'd have no particular reason to investigate?

I believe many mortgage lenders use this type of service http://www.experian.co.uk/consumer-information/mover-alerts-information.html

Identification of undisclosed Buy-to-Let risk

When a customer lets out their home without advising their mortgage lender, it means the debt is incorrectly priced and risk is increased. Getting early notification of properties to rent with Mover Alerts allows the lender to be proactive in protecting its position.

GAH

Read my last post OP, i said it was a different scenario but it is still fraud all the same.

If you can afford whatever penalties are thrown at you, then go for it.

If your the sort of person that is happy to do this though, i would imagine you are the sort of person that would probably think having a Gas Saferty record done too is a waste of time.

sonastin

Don't forget that with crime there is always the question of intent too. A luckless homeowner who was unable to pay the mortgage without working, unable to find work without moving, unable to sell without paying off the mortgage due to negative equity etc probably wouldn't face prison for letting without consent.

Someone who deliberately sets out to purchase a rental property with no intention of ever living in the property and knowingly chooses to defraud the mortgage lender for his own gain is more likely to face a harsher penalty. That is why there are usually a range of outcomes available under criminal law.

As for the "not all laws need to be obeyed" argument. What are you going to do if your tenant doesn't get around to moving out when you want the property back. I suppose you'll give him 24 hours notice then chuck all of his possessions out on the street. After all, you don't need to worry about the laws relating to illegal evictions. But then again, someone might find out about that. I suppose you could kill him. I mean, murder might be against the law but he was living in your house when you didn't want him there and after all, it doesn't matter if its the law, you don't have to obey it - right?

Or maybe not. The way to deal with laws you don't like is to get them changed - get yourself elected as an MP, lobby your local council, take part in protest marches. Don't just flout the law because it doesn't apply to you - or some bigger badder bully might decide that it doesn't apply to him either and do something that you don't like.

LittleMissAspie

zappahey wrote: »

I believe many mortgage lenders use this type of service http://www.experian.co.uk/consumer-information/mover-alerts-information.html

That wouldn't apply to the OP if he is renting to a family member, only if the family member moved out and he had to put it on the general renting market.

I don't know why the OP thinks a higher rate is a rip off though. It's a business loan and is more risky than a normal mortgage.

brit1234

moneysaver45 wrote: »

I do not believe for one second you would go to prison for this so-called 'crime'. That is scaremongering. The difference in profit between a residential mortgage and a buy-to-let is substantial enough to make a big difference, we're not just talking about a couple of hundred quid here.

No that's the law not scare mongering. You won't go to Magistrates Court, you go to Crown Court for trial because it gives longer sentences. Magistrates court is limited to 6 month prison sentences and I have never had a fraud case which hasn't gone to Crown Court.

Fraud by false representation

(1)A person is in breach of this section if he—

(a)dishonestly makes a false representation, and

(b)intends, by making the representation—

(i)to make a gain for himself or another, or

(ii)to cause loss to another or to expose another to a risk of loss.

(2)A representation is false if—

(a)it is untrue or misleading, and

(b)the person making it knows that it is, or might be, untrue or misleading.

(3)“Representation” means any representation as to fact or law, including a representation as to the state of mind of—

(a)the person making the representation, or

(b)any other person.

(4)A representation may be express or implied.

(5)For the purposes of this section a representation may be regarded as made if it (or anything implying it) is submitted in any form to any system or device designed to receive, convey or respond to communications (with or without human intervention).

http://www.legislation.gov.uk/ukpga/2006/35/section/2

Say that I was scaremongering to the Crown Court Judge.

MissMoneypenny

Lets hope your friend doesn't burn the property down, as the insurers won't pay out if you haven't recieved permission to let the property.

http://www.arla.co.uk/information/in...ngs-insurance/

"Consent. It is essential that you advise and obtain consent to let your property from your mortgage lender, existing insurer and head lessee (for leasehold properties). Failure to obtain written consent from these parties may render your insurance void in the event of a claim. Sadly there have been many instances where buildings claims have been totally rejected because the insurer and or mortgage lender was not advised the property was let."

moneysaver45

sonastin wrote: »

Don't forget that with crime there is always the question of intent too. A luckless homeowner who was unable to pay the mortgage without working, unable to find work without moving, unable to sell without paying off the mortgage due to negative equity etc probably wouldn't face prison for letting without consent.

Someone who deliberately sets out to purchase a rental property with no intention of ever living in the property and knowingly chooses to defraud the mortgage lender for his own gain is more likely to face a harsher penalty. That is why there are usually a range of outcomes available under criminal law.

As for the "not all laws need to be obeyed" argument. What are you going to do if your tenant doesn't get around to moving out when you want the property back. I suppose you'll give him 24 hours notice then chuck all of his possessions out on the street. After all, you don't need to worry about the laws relating to illegal evictions. But then again, someone might find out about that. I suppose you could kill him. I mean, murder might be against the law but he was living in your house when you didn't want him there and after all, it doesn't matter if its the law, you don't have to obey it - right?

Or maybe not. The way to deal with laws you don't like is to get them changed - get yourself elected as an MP, lobby your local council, take part in protest marches. Don't just flout the law because it doesn't apply to you - or some bigger badder bully might decide that it doesn't apply to him either and do something that you don't like.

Your preemptive ridicule of the truth doesn't change the fact that it is still the truth. Not all laws are just. And laws that are unjust should not be obeyed ever, at all. Laws relating to murder, assault, unlawful eviction etc are just laws.

A bank charging a different interest rate for lending you the same money just because of what exactly you plan to do with said money is not just. I would say it even amounts to discrimination.

Let's use an example. The UK government introduces a law that says the over-65's should be euthanised so that the state can save on pensions. Would you say that law should be followed until it is changed by 'lobbying MP's and taking part in protest marches'? Or would you say that's an unjust law and should never be followed regardless?

Those who would blindly follow any law given to them, simply because it is a law, are a dictators dream citizen.