remortgage problem due to my stupidity

Flakey

Hi, would appreciate some advice.
I am trying to remortgage our home which is currently mortgage free to raise the funds to pay inheritance tax and buy my brother out from an apartment in spain which we inherited from my late mother. If i can't raise the money we will lose the property.
I have applied to first direct for a 25% mortgage on our property and been accepted but i stupidly said the mortgage was to pay for an extension on our property as i thought it would complicate things to borrow for a property abroad. First direct now want to see the planning consent before they will release the funds!
Should i come clean and tell them why i want the money? Will they still lend? If i apply to someone else and this time admit what i want the money for would i get a mortgage and would i risk my credit rating.?
Does anyone know a lender who would be likely to lend for this purpose?
Any advice would be appreciated.

foxwales

Depending on their own policy on how they would deal with this will determine whether they report you for fraud.

Knowingly appropriating funds for a purpose other than intended when asked on the application which forms the contract is indeed fraud.

Phone them and tell them you've had to cancel the idea of having an extension in light of this problem with the foreign property and would they permit a change in purpose for the funds.

DO NOT tell them you lied

ACG

And they will say...."but you still want to borrow the exact same amout".

They wont trust you and if i were an underwriter i would decline it due to not knowing what its for.

Ive worked for a bank, and underwriters are naturally suspcious. Theyre not looking to decline applications but they want to be safe in the knowledge its for its intended use as they have to put their name next to any lending.

Flakey

Crikey, thanks for the advice foxwales, I really hadn't thought this through.
I think i might just cancel the application and make a fresh one elsewhere and be up front next time.

kingstreet

I reckon FD would have done this anyway, had you told the truth. You've been a member here since last November. Why didn't you run it past us before you applied?

If your current property is unencumbered, you'll have legal costs to pay. How far did the remortgage get down the road?

BristolBob

foxwales wrote: »

DO NOT tell them you lied

I completely agree with foxwales! You must not reveal to them your true intention unless you want to be accused (correctly) of fraud by false representation. This is a criminal offence with a custodial sentence.

Flakey

You are right i should have got advice first!
Filled out application and they have said all ok subject to planning permission. Have paid nothing up front as looked at fees free mortgage.
If i go ahead and cancel which other lenders would be likely to lend as i don't wamt to make multiple applications an affect my credit rating and lose any chance of sorting this stupid mess i've gotten myself into.

kingstreet

BristolBob wrote: »

I completely agree with foxwales! You must not reveal to them your true intention unless you want to be accused (correctly) of fraud by false representation. This is a criminal offence with a custodial sentence.

While your conclusion is legally correct, it's more likely the applicant would find himself the subject of an entry on CIFAS or NH suggesting lenders look very carefully at future applications for credit.

Flakey - I don't know any lender which extends free legals into a remortgage of an unencumbered property. Maybe others can clarify?

Conrad

Flakey wrote: »

which other lenders would be likely to lend as i don't wamt to make multiple applications

It's not straight froward as one question leads to another. For example some allow outright pruchase of a foreign property but others won't lend if you are taking a foreign mortgage too.

Also be aware some lenders such as Northern Rock make a habit of requesting a copy of the foreign slaes contract as they worry you might be spending the cash of drink and drugs for example.

A good mortgage broker will help

Good luck

Flakey

Thanks Conrad
I only need to borrow half of the value of the property in spain as i have already inherited half so i could cover this with the remortgage of the proprty i lve in.
Still undecided if i should contact first direct and ask them to consider the application for the property in spain rather than extension or make new application.
Having never used a mortgage broker how would i go about finding a reputable one?

Thrugelmir

Flakey wrote: »

Still undecided if i should contact first direct and ask them to consider the application for the property in spain rather than extension or make new application.

Best to divorce the two issues. Ring First Direct and tell them you no longer wish to proceed.

Then make enquiries as to whether remortgaging the property for acquiring property abroad is something they will consider. Before even submitting a formal application.