What happens if I do not get a Buy to Let mortgage and rent out property ?

sukh38

Hi,

So in order to get a buy to let mortgage on a £100k I need at least £25k depost but on a normal mortgage I need £10k,

So if I take out a "non" buy to let mortgage and move in students is this against the law?

What could happen?

Could you please advise?

kingstreet

It's potentially mortgage fraud. That could see a fraud marker placed on your credit file. The loan could be called as you would be in breach of the terms you accepted at completion.

More likely, your lender will simply find out and start charging you a premium on your interest rate. For example, LBG is now cross-checking Halifax mortgage accounts with other LBG group products to see if the addresses match.

Halifax mortgage at one address ,with Lloyds current account at another, triggers a letter asking you to prove you are living in the mortgaged property and if you are unable to do so, there's a 1% premium on the rate for unauthorised letting.

Halifax also hits landlords with a change to a 6% three year fix with £1,000 fee in return for a three year consent to let.

Others may follow suit in the future.

Owain_Moneysaver

kingstreet wrote: »

It's potentially mortgage fraud. That could see a fraud marker placed on your credit file.

And a criminal conviction.

And a civil claim from the students who have to find somewhere else to live. Potentially if their studies are affected and they have to retake a year then their additional student fees and subsistence expenses and compensation for a year's loss of earnings.

Simon_gloster

All lenders have fraud departments and general monitoring units.

The slightest trigger on an account or info from 3rd parties will enforce action if unauthorised tenancy happens. They've seen it before so they know how to deal with it.

At the end of the day it's your choice, but you have been warned nicely!!!

Yorkie1

Just to be clear about the fraud marker on your credit file, this could impact on any applications you make for a credit card, insurance, loans, mortgages in future. Not to be undertaken lightly.

Thrugelmir

sukh38 wrote: »

Hi,

So in order to get a buy to let mortgage on a £100k I need at least £25k depost but on a normal mortgage I need £10k,

So if I take out a "non" buy to let mortgage and move in students is this against the law?

What could happen?

Could you please advise?

With only a 10% deposit is it worth the risk? As the potential return is somewhat limited.

Dan-Dan

as if the 98 page thread from henman bill wasnt enough!!

Thrugelmir

Dan-Dan wrote: »

as if the 98 page thread from henman bill wasnt enough!!

Seems as if the attraction of property as an "investment" hasn't worn off yet.