Selling a house with a clause to family?

System

Sounds like a situation where there is a residential mortgage but it should have been BTL. The sisters are unwitting LLs regardless of their good intent.

Another possible opinion is that it could be considered mortgage fraud - obtaining a mortgage on behalf of someone who would not have qualified.

Kynthia

!!!!!! wrote: »

Sounds like a situation where there is a residential mortgage but it should have been BTL. The sisters are unwitting LLs regardless of their good intent.

Another possible opinion is that it could be considered mortgage fraud - obtaining a mortgage on behalf of someone who would not have qualified.

Your first point is possibly true but equally might not be the case. We don't know if the OP got a residential mortgage and we don't know whether they were up front about the situation to the lender. Some lenders allow a second home to be on a residential mortgage is family will be living there in a non-commercial situation. I do wonder whether the HMRC would still class the mum's mortgage payments as rent and therefore expect this 'income' to be declared for tax.

I struggle to see how your second point could be true at all. The mortgage is in the Op's name, they passed the checks to qualify for lending, they are responsible for ensuring the repayments are made, they own the asset that the loan is secured against. So where is the fraud? Only possibly if the lender thinks they are living at the property and would class the current set up as a BTL situation can I see that the lender would consider there to have been fraud.