No Consent to Let

ksjohnson

Hi


My wife and I are about to submit the final details to our mortgage broker (L&C) for them to go ahead with our mortgage application to Nat West. However I am deliberating what to day about the mortgage my wife has with her sister on a flat.


The flat is currently rented out without any consent to let from the mortgage provider (HSBC). My wife and her sister are on the mortgage but neither have lived there since 2011. He sister and husband have been trying to get a buy to let mortgage on it as they want to take on the flat as an investment, but failing due to how little it is worth etc.


Her sister and husband have gone into HSBC today to confess all and they have been told to complete details of how long it is rented etc, and HSBC say that as they were not making money (both my wife and her sister were putting in £165 per month to cover the service charge) they should be able to give them a consent to let mortgage once they have full details.


So, back to our application - the broker wants to know all of the details on the mortgage and what the terms of it are. If I say it is a mortgage with no consent to let (they know it is rented) will it negatively affect our chances of getting a mortgage as she was committing 'mortgage fraud'? Or should I say it is a consent to let, which it will be in due course, and hope that they do not check. I'm not sure if the could find out or if they would check anyway?


We're desperate for the mortgage to go through OK and this would be the only stumbling block. At the end of the day is it a flat she has not lived in or actively been involved in for years, we are just waiting whilst her sister messes around and eventually takes it off her hands.


Thoughts....?

Thrugelmir

ksjohnson wrote: »

At the end of the day is it a flat she has not lived in or actively been involved in for years, we are just waiting whilst her sister messes around and eventually takes it off her hands.

Maybe so. However it's a financial commitment that she's also currently subsidising. If the property were to generate no income for any reason then the liability could potentially be far greater. HSBC could also impose terms on granting CTL such as a higher rate of interest. There's also the possibility that CTL may only be granted for a specified period. After which remortgaging or selling the property maybe the only options.

Annisele

ksjohnson wrote: »

Or should I say it is a consent to let, which it will be in due course, and hope that they do not check.

I wouldn't do that.

So far, I can't see any mortgage fraud. Your wife and her sister have certainly breached the terms of their contract with HSBC, that that's not fraud - it's just a plain civil breach of contract. Definitely not to be recommended, but not fraudulent either.

If you lie to the new lender in the hope of borrowing money you wouldn't otherwise be entitled to, that would be fraud. Lenders tend to be much less happy about deliberately fraudulent acts than they are about people who didn't understand they needed CTL.

I know that sound sanctimonious, but if caught the consequences of lying to the lender could be extremely unpleasant.

Coming clean with the broker is likely the best way forward. He or she will know which lenders ask which questions, and how different lenders will view your situation.

At the end of the day is it a flat she has not lived in or actively been involved in for years, we are just waiting whilst her sister messes around and eventually takes it off her hands.

Unfortunately for your wife (and you) your wife and your sister have a joint mortgage - so they're both wholly responsible for sorting it out. "It's my sister's fault" won't wash with the lender.

Hope you get it sorted.

chappers

Annisele wrote: »

Coming clean with the broker is likely the best way forward. He or she will know which lenders ask which questions, and how different lenders will view your situation.

^^^^This

Also will then be able to tell you how this arrangement may affect your new mortgage and what you may need to do first before applying.

macman

On what basis have you taken out buildings insurance on the property? If it's not covered for rental purposes then any claim you might have to make would be rejected, as the policy will be invalid-which in itself is also a breach of the mortgage terms, though that is probably the least of your worries.

Typhoon2000

macman wrote: »

On what basis have you taken out buildings insurance on the property? If it's not covered for rental purposes then any claim you might have to make would be rejected, as the policy will be invalid-which in itself is also a breach of the mortgage terms, though that is probably the least of your worries.

As the op has mentioned flat and service charge, I image the freeholder sorts out insurance.

PBA

The new lender won't care if you've got consent to let or not, all they will be interested in is if the property is self financing. You won't need to lie about consent to let, primarily because they won't ask.

kingstreet

PBA wrote: »

The new lender won't care if you've got consent to let or not, all they will be interested in is if the property is self financing. You won't need to lie about consent to let, primarily because they won't ask.

Many lenders will want to see confirmation of consent to let and/or a BTL mortgage offer IMHO.

Then, they will require evidence of the rental income being received, by AST and/or three months bank statements.

Finally, if the property isn't self-financing expect the difference between rent and mortgage costs to be deducted from affordability for new mortgage.