Consent to let on a new mortgage - first time buyer

Marco_Brandon

Hi I'm new to this forum but I have browsed around for general advice in the past and have found you all to be very helpful. I'm hoping that someone can give me some advice on a personal matter.

Me and my girlfriend have just bought a 3 bed house together where we intend to live together for the foreseeable future. The paperwork is still in process but it's all looking good. I just got a letter from the lender (Natwest) with a declaration for me to sign stating that this property will be my main home to reside in and that I will not let it out.
Here's the problem; we were supposed to get married before buying the house but due to a death in the family we postponed it out of respect. Our parents are quite traditional (as are we) and would prefer not to move in together until we are married (within the next 12 months for sure).

I would like to make it clear that this is property will absolutely be our main residence and not a rental/investment property. Due to our circumstances I need to rent it out for the next 12 months, but from what I understand is that bank do not offer CTLs as much anymore, and if they do they'd force me onto higher rate B2L mortgage or some rip off premium.

My questions are:

1) Am I committing a crime by not declaring to my bank that I am renting this property out? All income will be declared for tax purposes of course.

2) I know it's technically mortgage fraud and I could end up getting blacklisted - but what is the likelihood of my bank finding out and actually prosecuting me? Has this happened often before?

It's just hard to live knowing that we bailed the bank outs but yet they continue rip customers off in every way possible.


I'm looking forward to your thoughts. Happy new year everyone.

R_P_W

How has the bank ripped you off?

Why don't you just live in the house on your own? Or why don't you just both live in the house?

Wh05apk

There is almost no chance of them giving you CTL from day one, as they would rightly assume that you bought it with the intention of renting the property out as a BTL.


If you have no intention of living there for 12 months, why are you buying now?

ethank

The Bank is not ripping you off. If you rent out the property, it makes it more difficult for them to repossess it in the event you do not pay. It makes it more expensive and risky for the property to be tenanted and they therefore price accordingly.

Are you so strong about your traditional feelings that you would put your property at risk, and actually act in a dishonest manner in order to ensure you kept them?

To me being dishonest (even to a bank) would probably rank lower than living in sin!

leveller2911

I smell a Troll .........

Soot2006

You don't have to move in *together*.
Just one of you needs to move in + take on a lodger for the 12 months.

Marco_Brandon

Think I came off on the wrong foot here. Valid point; why did I buy a house of we can't move in yet? I think I was tired when I wrote my first message: the offer was already made and at the same time we were planning to get married - tricky situation I know but the perfect house came up and we didn't want to miss it. But then we had a death in the family, so had to delay the wedding.

Anyway, is anyone able to answer my questions?

Marco_Brandon

leveller2911 wrote: »

I smell a Troll .........

Take a shower then

Yorkie1

1. You are committing a crime at the point of applying for a residential mortgage, knowing that you will be renting it out immediately. That's actual mortgage fraud, not just technical fraud.

2. The lenders have got increasingly sophisticated at their ability to identify mismatches between where people do live, and where they claim to live. There are link ups between the credit reference agencies and lenders, for example. Nobody can tell whether you would be found out, but if you are then a worst case scenario is a) you are required to pay the mortgage off immediately, and b) you have a fraud marker put on the National Hunter database which will prevent you getting any financial products for the foreseeable future. This includes insurance products, for example, not just mortgages.

Really, don't be a fool and risk it by letting it out.

Others have given you good advice about 1 of you moving in. That would prevent the difficulties mentioned above.

Marco_Brandon

Yorkie1 wrote: »

1. You are committing a crime at the point of applying for a residential mortgage, knowing that you will be renting it out immediately. That's actual mortgage fraud, not just technical fraud.

2. The lenders have got increasingly sophisticated at their ability to identify mismatches between where people do live, and where they claim to live. There are link ups between the credit reference agencies and lenders, for example. Nobody can tell whether you would be found out, but if you are then a worst case scenario is a) you are required to pay the mortgage off immediately, and b) you have a fraud marker put on the National Hunter database which will prevent you getting any financial products for the foreseeable future. This includes insurance products, for example, not just mortgages.

Really, don't be a fool and risk it by letting it out.

Others have given you good advice about 1 of you moving in. That would prevent the difficulties mentioned above.

Thank you. This is what I wanted to know. I'm new to mortgages so I just wanted to clarify my understanding of how things work. Very helpful.

So as long as I move in myself, and then subsequently take on rent paying lodgers whilst still remaining in the property, I am not breaking any law or rules? I like the sound of that, might actual go ahead with it. Now I need to look into getting a multiple occupancy license *sigh*:

Yorkie1

Marco_Brandon wrote: »

Thank you. This is what I wanted to know. I'm new to mortgages so I just wanted to clarify my understanding of how things work. Very helpful.

So as long as I move in myself, and then subsequently take on rent paying lodgers whilst still remaining in the property, I am not breaking any law or rules? I like the sound of that, might actual go ahead with it. Now I need to look into getting a multiple occupancy license *sigh*:

I think that would be fine.

You won't be able to use the lodger income as a basis for the mortgage application, though, in case that was what you were thinking.

How many lodgers would you intend to take on, and why do you think you'd need a HMO licence?